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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________

FORM 10-Q

___________________________________

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission file number 001-42844

___________________________________

Black Rock Coffee Bar, Inc.

(Exact name of registrant as specified in its charter)

___________________________________


Texas						33-5053729
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

9170 E. Bahia Drive, Suite 101, Scottsdale, AZ						85260
(Address of Principal Executive Offices)						(Zip Code)

(458) 256-9668

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.00001 per share	BRCB	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes o No x

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

As of November 10, 2025, the number of outstanding shares of each class of the registrant's common stock was as follows:

Class A common stock 17,478,452

Class B common stock 10,377,136

Class C common stock 22,200,219

Table of Contents

TABLE OF CONTENTS


			Page

Part I - Financial Information			1
Item 1. Financial Statements (Unaudited)			1
Unaudited C ondensed Cons olidated Balance Sheets			1
Unaudited Condensed Consolidated Statements of Operations			3
Unaudited Condensed Consolidated Statements of Changes in Temporary Equity, Members’ Deficit and Shareholders' Equity			4
Unaudited Condensed Consolidated Statements of Cash Flows			7
Notes to the Unau dited Condensed Consolidated Financial Statements			9
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			28
Item 3. Quantitative and Qualitative Disclosures About Market Risk			47
Item 4. Controls and Procedures			48

Part II - Other Information			49
Item 1. Legal Proceedings			49
Item 1A. Risk Factors			49
Item 2. Unregistered Sales of Equity Secu rit ies and Use of P roceeds			89
Item 3. Defaults Upon Senior Securities			90
Item 4. Mine Safety Disclosures			90
Item 5. Other Information			90
Item 6. Exhibits			91
Signatures			94

Table of Contents

GLOSSARY

As used in this Quarterly Report on Form 10-Q, unless the context otherwise requires, references to:

•“Average Unit Volume” or “AUV” represents the total trailing twelve-month store revenue of operating stores in the comparable store base, divided by the number of stores in the comparable store base.

•“Basis Adjustments” means increases in Black Rock Coffee Bar, Inc.’s allocable share of the tax basis in Black Rock OpCo’s assets resulting from (a) any redemptions or exchanges of LLC Units from the TRA Parties and (b) certain distributions (or deemed distributions) by Black Rock OpCo.

•“Black Rock,” the “Company,” “our company,” “we,” “us” and “our” means (i) prior to the consummation of the Transactions, Black Rock OpCo and its subsidiaries and (ii) after the Transactions, Black Rock Coffee Bar, Inc. and its consolidated subsidiaries.

•“Black Rock OpCo” means Black Rock Coffee Holdings, LLC, a Delaware limited liability company and, following the Transactions, a subsidiary of Black Rock Coffee Bar, Inc.

•“Black Rock OpCo LLC Agreement” means the amended and restated limited liability company agreement of Black Rock OpCo.

•“Blocker Companies” refers to certain entities that were owners of LLC Units in Black Rock OpCo prior to the Transactions that are taxable as corporations for U.S. federal income tax purposes.

•“Class A common stock” means Class A common stock, par value $0.00001 per share, of Black Rock Coffee Bar, Inc.

•“Class B common stock” means Class B common stock, par value $0.00001 per share, of Black Rock Coffee Bar, Inc.

•“Class C common stock” means Class C common stock, par value $0.00001 per share, of Black Rock Coffee Bar, Inc.

•“Co-Founders” means, collectively, Daniel Brand, Jeff Hernandez, Jake Spellmeyer and Bryan Pereboom.

•"Co-Founder Contribution" means the purchase, in connection with our IPO, by an entity affiliated with our Co-Founders of 3,118,938 LLC Units (and corresponding shares of Class C common stock) from Black Rock OpCo.

•“Continuing Equity Owners” means, collectively, the owners of LLC Units in Black Rock OpCo immediately prior to the consummation of the Transactions (excluding the Blocker Companies), which became holders of LLC Units and our Class B common stock or Class C common stock immediately following consummation of the Transactions, including our Co-Founders and certain of their affiliates, that may exchange, at each of their respective options, in whole or in part from time to time, their LLC Units for, at our election (determined solely by our independent directors (within the meaning of Nasdaq rules) who are disinterested), cash or newly issued shares of our Class A common stock. In connection with an exchange of LLC Units, a corresponding number of shares of Class B common stock or Class C common stock, as applicable, shall be immediately and automatically transferred to Black Rock Coffee Bar, Inc. for no consideration and canceled.

•“Cynosure Nominee” means the director designated by our Sponsor pursuant to the terms and conditions set forth in our amended and restated certificate of formation.

•“IPO” refers to our initial public offering, which we completed on September 15, 2025, and through which we offered 16,911,764 shares of our Class A common stock at a price to the public of $20.00

Table of Contents

per share, which includes the exercise in full by the underwriters of their option to purchase an additional 2,205,882 shares of our Class A common stock.

•“LLC Units” means the membership units of Black Rock OpCo.

•"New Credit Agreement" means the credit agreement entered into with JP Morgan Chase Bank, N.A., as the administrative agent, and various lenders, on September 15, 2025.

•"New Term Loan" means the $50.0 million term loan connected to the New Credit Agreement.

•"New Revolving Credit Facility" means the $25.0 million revolving credit facility connected to the New Credit Agreement.

•"New Credit Facilities" means the New Revolving Credit Facility together with the New Term Loan under the New Credit Agreement.

•“Prior Credit Facility” means our former term loan credit facilities that were governed by that certain Credit Agreement, dated as of April 29, 2022 (as amended by that certain first amendment to the Credit Agreement, dated of November 11, 2022, as further amended by that certain second amendment to the Credit Agreement, dated as of January 13, 2023, as further amended by that certain third amendment to the Credit Agreement, dated as of May 8, 2023, as further amended by that certain fourth amendment and limited waiver to the Credit Agreement, dated as of May 31, 2024, as further amended by that certain fifth amendment to Credit Agreement, dated as of April 24, 2025, and as further amended, amended and restated, extended, supplemented or otherwise modified in writing from time to time), by and among the Company, the guarantors party thereto, the lenders party thereto, RCS Agent, LLC, as administrative agent, and TCW Asset Management Company, LLC, as collateral agent.

•"Refinancing" means the refinancing of our Prior Credit Facility and entering into the New Credit Facilities, which occurred as part of the Transactions.

•“Sponsor” means The Cynosure Group, LLC and its affiliates.

•“Tax Receivable Agreement” means the tax receivable agreement, dated September 11, 2025, entered into with Black Rock OpCo and the TRA Parties.

•“TRA Parties” refers to, collectively, our Co-Founders and certain of their affiliates, including Viking Cake, our Sponsor, all of our current executive officers and Richard Federico and Sarah Goldsmith-Grover, each a director, and any future party to the Tax Receivable Agreement.

•“Transactions” refers to the organizational transactions described in The Transactions below and the application of the net proceeds therefrom.

•“Viking Cake” means Viking Cake BR, LLC, an entity controlled by our Co-Founders, and its affiliates.

The Transactions

Black Rock Coffee Bar, Inc. was originally incorporated as a Delaware corporation on May 2, 2025 and, in June 2025, re-domiciled to be incorporated in Texas. Black Rock Coffee Bar, Inc. is a holding company and the sole managing member of Black Rock OpCo, and its principal asset consists of LLC Units. Prior to our IPO and the Transactions described below, all of our business operations were conducted through Black Rock OpCo, and the Continuing Equity Owners and the Blocker Companies were the only members of Black Rock OpCo. In connection with the consummation of the IPO, we undertook certain organizational transactions, including:

•We amended and restated the Black Rock OpCo LLC Agreement to, among other things, (i) recapitalize its capital structure by creating a single new class of units, (ii) appoint Black Rock Coffee Bar, Inc. as the sole managing member of Black Rock OpCo, and (iii) provide certain redemption rights to the Continuing Equity Owners.

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•We amended and restated Black Rock Coffee Bar, Inc.’s certificate of formation to, among other things, provide (i) for Class A common stock, with each share of our Class A common stock entitling its holder to one vote per share on all matters presented to our shareholders generally, (ii) for Class B common stock, with each share of our Class B common stock entitling its holder to one vote per share on all matters presented to our shareholders generally, (iii) for Class C common stock, with each share of our Class C common stock entitling its holder to ten votes per share on all matters presented to our shareholders generally, subject to certain sunset provisions, and (iv) for preferred stock, which can be issued by our Board of Directors in one or more series without shareholder approval.

•We issued 23,460,312 shares of our Class B common stock to the Continuing Equity Owners, which is equal to the number of LLC Units held by such Continuing Equity Owners, for nominal consideration; we issued 19,618,915 shares of our Class C common stock to our Co-Founders and certain of their affiliates, which is equal to the number of LLC Units held by such Co-Founders and certain of their affiliates, for nominal consideration.

•We entered into the Tax Receivable Agreement with Black Rock OpCo and the TRA Parties that provides for the payment by Black Rock Coffee Bar, Inc. to the TRA Parties of 85% of the amount of tax benefits, if any, that Black Rock Coffee Bar, Inc. actually realizes, or in some circumstances is deemed to realize, as a result of Basis Adjustments and certain tax benefits (such as interest deductions) arising from payments made under the Tax Receivable Agreement.

•We issued 16,911,764 shares of our Class A common stock, which includes the exercise in full by the underwriters of their option to purchase an additional 2,205,882 shares of our Class A common stock, in exchange for net proceeds of approximately $314.6 million at the IPO price of $20.00, less the underwriting discounts and commissions.

•An affiliate of our Co-Founders purchased 3,118,938 newly issued LLC Units from Black Rock OpCo for approximately $62.4 million;

•We used the net proceeds from the IPO to purchase (i) 3,857,642 newly issued LLC Units for approximately $71.8 million directly from Black Rock OpCo; and (ii) purchase 13,054,122 LLC Units from certain Continuing Equity Owners for approximately $242.8 million, in each case, at the IPO price of $20.00 per share less the underwriting discounts and commissions, excluding offering expenses of approximately $8.0 million payable by Black Rock OpCo.

•Concurrently with the closing of the IPO, we refinanced our Prior Credit Facility and entered into the New Credit Facilities.

•Upon closing of the IPO on September 15, 2025, there were 17,478,452 shares of Class A common stock, 10,377,136 shares of Class B common stock, 22,200,219 shares of Class C common stock and 50,055,807 LLC Units outstanding.

•Black Rock OpCo used or intends to use the proceeds from the sale of its LLC Units to us, together with proceeds from the Refinancing and the Co-Founder Contribution, (i) to repay all $113.2 million of outstanding borrowings under the Prior Credit Facility, (ii) to pay offering expenses of $8.0 million and (iii) for general corporate purposes.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future financial condition, future operations, projected costs, prospects, plans, objectives of management, and expected market growth, are forward-looking statements. We caution you that the foregoing list does not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “shall,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” “goal,” “objective,” “seeks,” or “continue,” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions. Important factors beyond our control could cause our actual results, financial condition, performance or achievements to be materially different from the expected results,

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performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the following:

•our inability to successfully identify and secure appropriate sites and timely develop and expand our operations;

•our inability to protect our brand and reputation;

•our inability to secure, protect, and enforce our intellectual property rights;

•our dependence on a small number of suppliers and two roasting facilities;

•our dependence on third-party information technology systems and services;

•our and our vendors’ vulnerability to security breaches, including breaches that may impact confidential customer information;

•our expectations regarding our future operating and financial performance;

•the size of our addressable markets, market share, and market trends;

•our ability to compete in our industry;

•changes in consumer tastes and nutritional and dietary trends;

•our ability to effectively manage the continued growth of our workforce and operations;

•our inability to open profitable stores;

•our failure to generate projected same store sales growth;

•the sufficiency of our cash, cash equivalents, and investments to meet our liquidity needs;

•our dependence on long-term non-cancelable leases;

•our relationship with our employees and the status of our workers;

•the effects of seasonal trends on our results of operations;

•our vulnerability to global financial market conditions, including inflation and other macroeconomic factors;

•our ability to attract, retain, and motivate skilled personnel, including key members of our senior management;

•our vulnerability to adverse weather conditions in local or regional areas where our stores are located;

•our realization of any benefit from the Tax Receivable Agreements and our organizational structure;

•the increased expenses associated with being a public company; and

•other factors set forth in Part II, Item 1A “Risk Factors” in this Quarterly Report on Form 10-Q.

You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations, estimates, forecasts, and projections about future events and trends that we believe may affect our business, results of operations, financial condition, and prospects. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Quarterly Report on Form 10-Q, we cannot guarantee that the future results, levels of activity, performance, or events and circumstances reflected in the forward-looking statements will be achieved or occur at all. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described above, in “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, events, and circumstances reflected in the forward-looking

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statements may not be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made herein to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements.

SUMMARY RISK FACTORS

Investing in our Class A common stock involves a high degree of risk because our business is subject to numerous risks and uncertainties, including those described in Part II, Item 1A. Risk Factors. You should carefully consider these risks and uncertainties when investing in our Class A common stock. The principal risks and uncertainties affecting our business include the following:

•We have a history of losses and, especially if we continue to grow at an accelerated rate, we may not achieve or maintain profitability in the future.

•Food safety and quality concerns may negatively impact our brand, business and results of operations.

•Evolving consumer preferences and tastes, including public or medical opinions about caffeine and sugar consumption, or changes in consumer spending may adversely affect our business.

•We may not be able to compete successfully with other coffee stores, quick service restaurants and convenience stores, including the growing number of coffee delivery options.

•We may be unsuccessful in opening new stores or establishing new markets, which could adversely affect our growth.

•New stores, once opened, may not be profitable or may close, and the increases in average per store sales and comparable sales that we have experienced in the past may not be indicative of future results.

•Our marketing programs may not be successful, and our new menu items and advertising campaigns may not generate increased sales or profits, resulting in harm to our financial results.

•Interruption of our supply chain of coffee beans, food products, flavored syrups, dairy products, plant-based dairy-free alternative products or other ingredients, coffee machines and other restaurant equipment or packaging could affect our ability to produce or deliver our products.

•We have a limited number of suppliers, distributors and manufacturers for many of our frequently used ingredients, supplies and products. If our suppliers, distributors or manufacturers are unable to fulfill their obligations under our arrangements with them, we could encounter supply shortages and incur higher costs or fail to meet our sales demands or quality standards.

•Tariffs on certain imports to the United States and other potential changes to U.S. trade policy could have a material adverse effect on our business, results of operations, prospects and financial condition.

•Increases or sustained inflation in the cost of high-quality arabica coffee beans, dairy or other commodities or decreases in the availability of high-quality arabica coffee beans, dairy or other commodities could have an adverse impact on our business and financial results.

•Our stores are geographically concentrated in the Western United States and Texas, and we could be negatively affected by conditions specific to those regions.

•Our brand is core to our success, and damage to our brand or reputation and negative publicity could negatively impact our business, financial condition and results of operations.

•If we fail to offer high-quality guest experience, our business and reputation will suffer.

•We believe our culture has contributed to our success, and if we cannot maintain this culture as we grow, we could lose employee engagement, which could harm our business and reputation.

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•Our inability to identify, recruit and retain qualified individuals for our stores could slow our growth and adversely impact our ability to operate.

•Changes in the cost of labor could harm our business.

•If we or our vendors are unable to protect our guests’ credit and debit card data or other confidential information in connection with processing the same or our employees’ confidential information, we could be exposed to data loss, litigation, liability and reputational damage.

•The Tax Receivable Agreement with Black Rock OpCo and the TRA Parties requires us to make cash payments to the TRA Parties in respect of certain tax benefits to which we may become entitled, and we expect that such payments will be substantial.

•Our outstanding indebtedness could materially adversely affect our financial condition and our ability to operate our business, pursue our growth strategy, and react to changes in the economy or industry.

•We cannot predict the impact our multi-class structure may have on the market price of our Class A common stock.

•Our Co-Founders and Sponsor have significant influence over us, which could limit your ability to influence the outcome of matters submitted to shareholders for a vote.

•As a newly public company, we incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies in the United States, which may harm our business.

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Part I - Financial Information

Item 1. Financial Statements

BLACK ROCK COFFEE BAR, INC.

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands, except share and unit data)


	September 30, 2025		December 31, 2024
ASSETS
Current assets:
Cash and cash equivalents	$	32,646	$	10,227
Receivables, net	4,834		4,304
Inventories	2,786		2,055
Prepaid expenses and deposits	3,807		2,860
Total current assets	44,073		19,446
Property and equipment, net	87,721		69,989
Operating lease right-of-use assets, net	122,700		101,591
Note receivable from related party	—		5,184
Other assets	277		—
Goodwill	9,360		9,360
Deferred income tax asset	52,947		—
Intangible assets, net	6,118		7,342
Total assets	$	323,196	$	212,912

LIABILITIES, TEMPORARY EQUITY AND SHAREHOLDERS' EQUITY/MEMBERS' DEFICIT
Current liabilities:
Accounts payable	10,660		6,621
Accrued expenses	4,706		3,400
Accrued payroll and benefits	6,281		6,984
Deferred compensation	—		5,778
Gift card and loyalty program liability	1,316		1,186
Current portion of long-term debt	1,250		925
Current portion of operating lease liabilities	7,873		8,410
Total current liabilities	32,086		33,304
Tax receivable agreement liability	40,641		—
Long-term debt, net of current portion	17,615		89,269
Operating lease liabilities, net of current portion	132,496		107,000
Total liabilities	222,838		229,573
Commitments and Contingencies (Note 15)
Temporary equity
Series A ($1.00 par value per unit – 20,000,000 units authorized as of December 31, 2024; 3,804,698 units issued and outstanding as of December 31, 2024)	—		3,429
Series A-1 (2,000,000 units authorized; 1,468,058 units issued and outstanding as of December 31, 2024)	—		206,973
Series A-2 (900,000 units authorized; 893,835 units issued and outstanding as of December 31, 2024; aggregate liquidation preference of $168,785,545 as of December 31, 2024)	—		30,773
Total temporary equity	—		241,175
Shareholders equity/members' deficit
Members’ deficit (4,000,000 Class A Common Units authorized as of December 31, 2024; 2,646,087 units issued and outstanding as of December 31, 2024)	—		(257,836)
Preferred stock, par value $0.00001 per share; 20,000,000 shares authorized, no shares issued or outstanding as of September 30, 2025	—		—

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Class A common stock, par value $0.00001 per share; 500,000,000 shares authorized, 17,478,452 shares issued and outstanding as of September 30, 2025	—		—
Class B common stock, par value $0.00001 per share, 200,000,000 shares authorized, 10,377,136 shares issued and outstanding as of September 30, 2025	—		—
Class C common stock, par value $0.00001 per share, 50,000,000 shares authorized, 22,200,219 shares issued and outstanding as of September 30, 2025	—		—
Additional paid-in capital	43,757		—
Accumulated deficit	(712)		—
Total shareholders' equity attributable to Black Rock Coffee Bar, Inc./members' deficit	43,045		(257,836)
Noncontrolling interest	57,313		—
Total shareholders' equity/members' deficit	100,358		(257,836)
Total liabilities, temporary equity and shareholders' equity/members' deficit	$	323,196	$	212,912

See accompanying notes to the condensed consolidated financial statements

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BLACK ROCK COFFEE BAR, INC.

Condensed Consolidated Statements of Operations (Unaudited)

(in thousands, except share and per share amounts)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Store revenue	$	51,410	$	41,399	$	146,520	$	117,941
Other	58		56		162		164
Total revenue	51,468		41,455		146,682		118,105
Store operating costs and expenses (exclusive of depreciation and amortization presented separately below):
Beverage, food and packaging costs	14,286		11,719		41,641		33,977
Labor and related expenses	10,785		9,220		30,588		25,722
Occupancy and related expenses	4,034		3,229		11,641		9,644
Other store operating expenses	7,079		5,578		19,883		15,398
Total store operating costs and expenses	36,184		29,746		103,753		84,741
Selling, general and administrative expenses	17,158		4,894		31,898		17,457
Depreciation and amortization	3,030		2,533		8,856		7,334
Pre-opening costs	1,503		1,144		3,064		2,428
Total operating expenses	57,875		38,317		147,571		111,960
Income (loss) from operations	(6,407)		3,138		(889)		6,145
Interest expense, net	(2,871)		(3,073)		(9,028)		(8,188)
Other income (expense), net	(6,866)		(716)		(7,950)		(717)
Loss before income taxes	(16,144)		(651)		(17,867)		(2,760)
Income tax expense	31		71		253		197
Net loss	(16,175)		(722)		(18,120)		(2,957)
Less: Net loss attributable to Black Rock OpCo prior to the Transactions	(14,432)		—		(16,377)		—
Less: Net income (loss) attributable to noncontrolling interest	(1,031)		—		(1,031)		20
Net loss attributable to Black Rock Coffee Bar, Inc.	$	(712)	$	(722)	$	(712)	$	(2,977)
Net loss per share of Class A common stock: (1)
Basic	$	(0.05)	N/A		$	(0.05)	N/A
Diluted	$	(0.05)	N/A		$	(0.05)	N/A
Weighted-average shares of Class A common stock outstanding
Basic	14,808,173		N/A		14,808,173		N/A
Diluted	14,808,173		N/A		14,808,173		N/A

(1) Basic and diluted net loss per share of Class A common stock is applicable only for the period September 12, 2025 through September 30, 2025, which is the period effective with and following the IPO and Transactions (as defined in Note 1 to the Condensed Consolidated Financial Statements, unaudited).

See accompanying notes to the condensed consolidated financial statements

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BLACK ROCK COFFEE BAR, INC.

Condensed Consolidated Statements of Changes in Temporary Equity, Members’ Deficit and Shareholders' Equity (Unaudited)

(in thousands)


Three Months Ended September 30, 2025
	Black Rock OpCo								Black Rock Coffee Bar, Inc. Shareholders' Equity
	Temporary Equity								Class A Common stock			Class B Common stock			Class C Common stock
	Series A		Series A-1		Series A-2		Members’ Deficit		Shares	Amount		Shares	Amount		Shares	Amount		Additional Paid-In Capital		Accumulated Deficit		Noncontrolling Interest		Total
Balance at June 30, 2025	$	—	$	223,541	$	30,773	$	(276,949)	—	$	—	—	$	—	—	$	—	$	—	$	—	$	—	$	(276,949)
Net loss prior to Transactions	—		—		—		(14,432)		—	—		—	—		—	—		—		—		—		(14,432)
Deemed distribution for Series A-1 and Series A-2 Preferred Units	—		6,927		138,012		(144,939)		—	—		—	—		—	—		—		—		—		(144,939)
Equity-based compensation recognized in connection with the Transactions	—		—		—		631		—	—		—	—		—	—		—		—		—		631
Effect of the reorganization transactions	—		(230,468)		(168,785)		435,689		567	—		22,893	—		19,619	—		(481)		—		(35,955)		399,253
Issuance of Class A common stock sold in initial public offering, net of offering costs	—		—		—		—		16,912	—		—	—		—	—		306,512		—		—		306,512
Purchase of LLC Units and unitholder contribution in connection with the initial public offering	—		—		—		—		—	—		(12,516)	—		2,581	—		(274,572)		—		94,145		(180,427)
Impact of Tax Receivable Agreement	—		—		—		—		—	—		—	—		—	—		11,973		—		—		11,973
Net loss subsequent to the Transactions	—		—		—		—		—	—		—	—		—	—		—		(712)		(1,031)		(1,743)
Equity-based compensation recognized subsequent to the Transactions	—		—		—		—		—	—		—	—		—	—		325		—		154		479
Balance at September 30, 2025	$	—	$	—	$	—	$	—	17,479	$	—	10,377	$	—	22,200	$	—	$	43,757	$	(712)	$	57,313	$	100,358

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BLACK ROCK COFFEE BAR, INC.

Condensed Consolidated Statements of Changes in Temporary Equity, Members’ Deficit and Shareholders' Equity (Unaudited)

(in thousands)


Nine Months Ended September 30, 2025
	Black Rock OpCo								Black Rock Coffee Bar, Inc. Shareholders' Equity
	Temporary Equity								Class A Common stock			Class B Common stock			Class C Common stock
	Series A		Series A-1		Series A-2		Members’ Deficit		Shares	Amount		Shares	Amount		Shares	Amount		Additional Paid-In Capital		Accumulated Deficit		Noncontrolling Interest		Total
Balance at December 31, 2024	$	3,429	$	206,973	$	30,773	$	(257,836)	—	$	—	—	$	—	—	$	—	$	—	$	—	$	—	$	(257,836)
Net loss prior to Transactions	—		—		—		(16,377)		—	—		—	—		—	—		—		—		—		(16,377)
Deemed distribution for Series A-1 and Series A-2 Preferred Units	—		23,645		138,012		(161,657)		—	—		—	—		—	—		—		—		—		(161,657)
Unitholder distributions	—		(150)		—		(450)		—	—		—	—		—	—		—		—		—		(450)
Unitholder redemptions	(3,429)		—		—		—		—	—		—	—		—	—		—		—		—		—
Equity-based compensation recognized in connection with the Transactions	—		—		—		631		—	—		—	—		—	—		—		—		—		631
Effect of the reorganization transactions	—		(230,468)		(168,785)		435,689		567	—		22,893	—		19,619	—		(481)		—		(35,955)		399,253
Issuance of Class A common stock sold in initial public offering, net of offering costs	—		—		—		—		16,912	—		—	—		—	—		306,512		—		—		306,512
Purchase of LLC Units and unitholder contribution in connection with the initial public offering	—		—		—		—		—	—		(12,516)	—		2,581	—		(274,572)		—		94,145		(180,427)
Impact of Tax Receivable Agreement	—		—		—		—		—	—		—	—		—	—		11,973		—		—		11,973
Net loss subsequent to the Transactions	—		—		—		—		—	—		—	—		—	—		—		(712)		(1,031)		(1,743)
Equity-based compensation recognized subsequent to the Transactions	—		—		—		—		—	—		—	—		—	—		325		—		154		479
Balance at September 30, 2025	$	—	$	—	$	—	$	—	17,479	$	—	10,377	$	—	22,200	$	—	$	43,757	$	(712)	$	57,313	$	100,358

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BLACK ROCK COFFEE BAR, INC.

Condensed Consolidated Statements of Changes in Temporary Equity, Members’ Deficit and Shareholders' Equity (Unaudited)

(in thousands)


Three Months Ended September 30, 2024
	Temporary Equity						Total Members' Deficit and Noncontrolling Interest
	Series A		Series A-1		Series A-2		Members’ Deficit		Noncontrolling Interest		Total
Balance at June 30, 2024	$	8,000	$	191,660	$	30,773	$	(237,547)	$	—	$	(237,547)
Net loss	—		—		—		(722)		—		(722)
Deemed distribution for Series A-1 Preferred Units	—		7,168		—		(7,168)		—		(7,168)
Unitholder distributions	—		—		—		(24)		—		(24)
Unitholder redemptions	(2,286)		—		—		—		—		—
Balance at September 30, 2024	$	5,714	$	198,828	$	30,773	$	(245,461)	$	—	$	(245,461)


Nine Months Ended September 30, 2024
	Temporary Equity						Total Members' Deficit and Noncontrolling Interest
	Series A		Series A-1		Series A-2		Members’ Deficit		Noncontrolling Interest		Total
Balance at December 31, 2023	$	25,333	$	167,258	$	30,773	$	(226,512)	$	436	$	(226,076)
Net loss	—		—		—		(2,977)		—		(2,977)
Net income attributable to noncontrolling interest	—		—		—		—		20		20
Purchase of noncontrolled ownership interest	—		—		—		(1,111)		(456)		(1,567)
Deemed distribution for Series A-1 Preferred Units	—		21,720		—		(21,720)		—		(21,720)
Waiver of unpaid Series A preferred yield	(5,358)		—		—		5,358		—		5,358
Redemption discount on Series A Preferred Units	(1,975)		—		—		1,975		—		1,975
Unitholder contributions	—		10,000		—		—		—		—
Unitholder distributions	—		(150)		—		(474)		—		(474)
Unitholder redemptions	(12,286)		—		—		—		—		—
Balance at September 30, 2024	$	5,714	$	198,828	$	30,773	$	(245,461)	$	—	$	(245,461)

See accompanying notes to the condensed consolidated financial statements

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BLACK ROCK COFFEE BAR, INC.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands)


	Nine Months Ended September 30,
	2025		2024
Cash flows from operating activities:
Net loss	$	(18,120)	$	(2,957)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	8,856		7,334
Forgiveness of related party note receivable	5,273		—
Loss on disposal of property and equipment	—		314
Amortization of debt issuance costs and loan fees	1,047		977
Accrued paid-in-kind interest	133		291
Interest income from related party	(88)		(138)
Loss on extinguishment of debt	1,593		—
Equity-based compensation	868		—
Deferred income taxes	(91)		—
Non-cash operating lease costs	7,092		5,855
Changes in operating assets and liabilities:
Receivables, net	(530)		(3,626)
Inventories	(731)		(265)
Prepaid expenses and deposits	(946)		(1,239)
Other assets	(277)		—
Accounts payable	2,475		(307)
Accrued payroll and benefits	(703)		569
Deferred compensation	(5,778)		2,600
Accrued expenses	126		421
Gift card and loyalty program liability	130		39
Operating lease liabilities	(3,243)		(721)
Net cash provided by (used in) operating activities	(2,914)		9,147
Cash flows from investing activities:
Purchases of property and equipment	(22,928)		(18,247)
Purchase of intangible assets	(256)		(397)
Net cash used in investing activities	(23,184)		(18,644)
Cash flows from financing activities:
Proceeds from initial public offering, net of underwriting discounts and commissions	314,559		—
Payments of costs related to initial public offering	(7,484)		—
Purchase of LLC Units from Continuing Equity Owners	(242,807)		—
Proceeds from long-term debt	71,000		12,500
Payments on long-term debt	(143,747)		(662)
Payments of debt issuance costs and loan fees	(1,354)		(2,201)
Purchase of noncontrolling interest position	—		(1,567)
Payments for redemption of outstanding Series A units	(3,429)		(12,286)
Unitholder contributions	62,379		10,000
Unitholder distributions	(600)		(624)
Net cash provided by financing activities	48,517		5,160
Net increase (decrease) in cash and cash equivalents	22,419		(4,337)
Cash and cash equivalents, beginning of period	10,227		17,200
Cash and cash equivalents, end of period	$	32,646	$	12,863
Supplemental disclosure of cash flow information:
Cash paid during the year for interest, net of capitalized interest	8,959		7,488
Income taxes paid, net of refunds	240		174

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Supplemental disclosure of noncash investing and financing activities:
Deferred offering costs not yet paid	563	—
Additions of property and equipment accrued in accounts payable and accrued expenses	3,902	168

See accompanying notes to the condensed consolidated financial statements

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BLACK ROCK COFFEE BAR, INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

For the Three and Nine Months Ended September 30, 2025 and 2024

Note 1 - Organization and Nature of Operations

Nature of Operations

Black Rock Coffee Bar, Inc. was organized as a Delaware corporation on May 2, 2025, and in June 2025 re-domiciled to be incorporated in Texas for the purpose of facilitating an initial public offering (the "IPO") and other related transactions in order to carry on the business of Black Rock Coffee Holdings, LLC ("Black Rock OpCo") and its consolidated subsidiaries (together with Black Rock Coffee Bar, Inc., the "Company") as a publicly-traded entity.

The Company is a high-growth operator of guest-centric, drive-thru and lobby coffee bars offering premium caffeinated beverages and an elevated in-store experience. As of September 30, 2025, there were 169 stores operating in seven U.S. states.

Initial Public Offering and Reorganization Transactions

Black Rock Coffee Bar, Inc. successfully closed an IPO of 16,911,764 shares of Class A common stock at a public offering price of $20.00 per share on September 15, 2025, which included 2,205,882 shares of Class A common stock issued pursuant to the underwriters' option to purchase additional shares of Class A common stock. The net proceeds from the IPO aggregated to approximately $306.5 million, after deducting underwriting discounts and commissions and expenses payable in connection with the offering. Shares of Class A common stock began trading on the Nasdaq under the ticker symbol "BRCB" on September 12, 2025.

In connection with the IPO, Black Rock OpCo amended and restated its existing limited liability company agreement, to among other things, (i) recapitalize all existing ownership interests in Black Rock OpCo into 43,079,227 membership units of Black Rock OpCo (" LLC Units") (before giving effect to the use of proceeds from the IPO, as described below ), (ii) appoint Black Rock Coffee Bar, Inc. as the sole managing member of Black Rock OpCo, and (iii) provide certain redemption rights to the owners of the LLC Units in Black Rock OpCo, exclusive of the Company (the "Continuing Equity Owners").

Simultaneously, Black Rock Coffee Bar, Inc. amended and restated its certificate of formation to, among other things, provide (i) for Class A common stock, with each share of Class A common stock entitling its holder to one vote per share on all matters presented to the shareholders generally; (ii) for Class B common stock, with each share of Class B common stock entitling its holder to one vote per share on all matters presented to the shareholders generally; (iii) for Class C common stock, with each share of Class C common stock entitling its holder to ten votes per share on all matters presented to the shareholders generally, until the earlier of (a) September 15, 2035, and (b) with respect to each Co-Founder ("Co-Founder" refers to each of Daniel Brand, Jeff Hernandez, Jake Spellmeyer or Bryan Pereboom), the date on which the aggregate number of shares of Class C common stock held by such Co-Founder or certain of their affiliates is less than thirty-three percent (33%) of the shares of Class C common stock held by such Co-Founder and certain of their affiliates as of the closing of the IPO, each such holders Class C common stock will convert to fully paid non-assessable shares of Class B common stock; (iv) that shares of Class B and Class C common stock may only be held by the Continuing Equity Owners and their respective permitted transferees; and (v) for preferred stock, which can be issued by the board of directors in one or more series without shareholder approval. As a result, Black Rock Coffee Bar, Inc. became a holding company and the sole managing member of Black Rock OpCo and controls the business affairs of Black Rock OpCo.

Concurrently with the consummation of the IPO, an affiliate of the Company's Co-Founders purchased 3,118,938 newly issued LLC Units (and corresponding shares of the Company's Class C common stock) from Black Rock OpCo for approximately $62.4 million at a price per unit equal to $20.00 per share (the "IPO price"). Further, Black Rock Coffee Bar, Inc. used the net proceeds from the IPO to: (i) purchase 3,857,642 newly issued LLC Units for approximately $71.8 million directly from Black Rock OpCo at a price per unit equal to the IPO price of Class A common stock less the underwriting discount; and (ii) purchase 13,054,122 LLC Units from certain Continuing Equity Owners for approximately $242.8 million at a price per unit equal to the IPO price per share of Class A common stock less the underwriting discount.

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BLACK ROCK COFFEE BAR, INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

For the Three and Nine Months Ended September 30, 2025 and 2024

Note 2 - Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

In accordance with accounting principles generally accepted in the United States of America ("GAAP"), since the Continuing Equity Owners control the Company after the Transactions (i.e., there was no change in control of Black Rock OpCo), the financial statements of the combined entity represent a continuation of the financial position and results of operations of Black Rock OpCo. Accordingly, the historical cost basis of assets, liabilities, and equity of Black Rock OpCo are carried over to the condensed consolidated financial statements of the combined company as a common control transaction.

The accompanying unaudited condensed consolidated financial statements for the period prior to the
Transactions have been presented to combine the previously separate entities. These unaudited condensed and consolidated financial statements have been prepared in accordance with GAAP and the applicable rules and regulations of the United States Securities and Exchange Commission ("SEC") for interim financial information. Certain information and footnote disclosures normally included in annual financial statements presented in accordance with GAAP have been omitted pursuant to rules and regulations of the SEC. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of the results for the interim periods presented have been included.

The unaudited interim financial information should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2024 for Black Rock OpCo and as of May 2, 2025 for Black Rock Coffee Bar, Inc., included in the prospectus dated September 15, 2025 (No. 333-289685), as filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended ("Prospectus").

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of Black Rock Coffee Bar, Inc. and Black Rock OpCo. Black Rock OpCo is a variable interest entity and Black Rock Coffee Bar, Inc. is the primary beneficiary and sole managing member of Black Rock OpCo and has decision making authority that significantly affects the performance of the entity. Accordingly, the Company consolidates Black Rock OpCo and reports noncontrolling interest representing the economic interest in Black Rock OpCo held by the Continuing Equity Owners. All intercompany balances and transactions have been eliminated in consolidation.

The noncontrolling interests in the condensed consolidated statement of operations for the three and nine months ended September 30, 2025 represents the portion of earnings attributable to the economic interest in Black Rock OpCo held by the Continuing Equity Owners. The noncontrolling interest in the condensed consolidated balance sheets as of September 30, 2025 represents the portion of the net assets of the Company attributable to the Continuing Equity Owners, based on the portion of the LLC Units owned by such unit holders. As of September 30, 2025, the noncontrolling interest holders' economic ownership percentage was 65.0%.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions, primarily related to leases, temporary equity, equity-based compensation, impairment of long-lived assets including right-of-use assets, goodwill impairment, tax receivable agreement liability, income taxes, and gift card and loyalty program liability that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses for the reporting period. Although management bases its estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, actual results could differ from those estimates.

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BLACK ROCK COFFEE BAR, INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

For the Three and Nine Months Ended September 30, 2025 and 2024

Fair Value Measurements

Fair value is the price the Company would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants. For assets and liabilities recorded or disclosed at fair value on a recurring basis, the Company determined fair value based on the following:

•Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities.

•Level 2: Observable inputs other than quoted prices in active markets for identical assets or liabilities, quoted prices for identical assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3: Inputs that are both unobservable and significant to the overall fair value measurements reflecting an entity’s estimates of assumptions that market participants would use in pricing the asset or liability.

The Company’s condensed consolidated financial statements include cash and cash equivalents, accounts receivable, prepaid expenses and deposits, other current assets, accounts payable, accrued expenses and other current liabilities, for which the carrying amounts approximate fair value due to their short-term nature. The fair value of the Company’s variable-rate credit facilities approximates the carrying amounts as the cost of borrowing is variable and approximates current market prices, which is considered Level 2 in the fair value hierarchy.

Equity-Based Compensation

In connection with the IPO, the Company granted Class A common stock options and restricted stock units ("RSUs") to certain employees and directors. Equity-based compensation expense for Class A common stock options granted to employees is recognized based on the fair value of the awards granted, determined using the Black-Scholes-Merton (“Black-Scholes”) option-pricing model. The fair value of RSUs is based on the fair value of Class A common stock at the time of grant. Equity-based compensation expense is recognized as expense on a straight-line basis over the requisite service period. The Company accounts for forfeitures when they occur, and any compensation expense previously recognized on unvested equity-based awards will be reversed when forfeited.

Income Taxes

After the consummation of the IPO, Black Rock Coffee Bar, Inc. became subject to U.S. federal, state and local income taxes with respect to its allocable share of taxable income of Black Rock OpCo assessed at the prevailing corporate tax rates. Black Rock OpCo operates as a limited liability company and is treated as a partnership for income tax purposes. Accordingly, it incurs no significant liability for federal, or state income taxes since the taxable income or loss is passed through to its members. Black Rock OpCo incurs liabilities for certain state taxes payable directly by it.

The Company accounts for income taxes using the asset and liability method. Deferred income taxes reflect the net tax effects of temporary differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws expected to be in effect when such differences are expected to reverse. Such temporary differences are reflected as deferred income tax assets on the condensed consolidated balance sheets. A deferred tax asset is recognized if it is more likely than not that a tax benefit will be realized.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some or all of the deferred tax assets will be realized and, when necessary, a valuation allowance is established. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences become deductible.

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BLACK ROCK COFFEE BAR, INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

For the Three and Nine Months Ended September 30, 2025 and 2024

The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authority, based on the technical merits of the position. The Company does not believe it has any significant uncertain tax positions and therefore has no unrecognized tax benefits as of September 30, 2025, that if recognized, would affect the annual effective tax rate.

Tax Receivable Agreement

In connection with Transactions, the Company entered into a Tax Receivable Agreement ("TRA") with Black Rock OpCo and certain Continuing Equity Owners that will provide for the payment by Black Rock Coffee Bar, Inc. to the Continuing Equity Owners of 85% of the amount of tax benefits, if any, that Black Rock Coffee Bar, Inc. realizes (or in some circumstances is deemed to realize) related to the tax basis adjustments described in Note 11 as such savings are realized.

In addition to tax expenses, the Company will also make payments under the TRA, which could be material. The Company will account for the income tax effects and corresponding TRA's effect resulting from future taxable purchases or redemptions of LLC Units of the Continuing Equity Owners by recognizing an increase in deferred tax assets, based on enacted tax rates at the date of the purchase or redemptions. Further, the Company will evaluate the likelihood that it will realize the benefit represented by the deferred tax assets and, to the extent that management estimates that it is more-likely-than-not that the Company will not realize the benefit, the Company will reduce the carrying amount of the deferred tax asset with a valuation allowance. The amounts to be recorded for both the deferred tax assets and the liability for obligations under the TRA will be estimated at the time of any purchase or redemption as a change to shareholders' equity, and effects of changes in any estimates after this date will be included in net income (loss). Similarly, the effect of subsequent changes in the enacted tax rates will be included in net income (loss). Judgment is required in assessing the future tax consequences of events that have been recognized in the Company's financial statements.

Deferred Offering Costs

Deferred offering costs are capitalized and consist of legal, accounting, and other costs directly attributable to the IPO. During the three and nine months ended September 30, 2025, the Company reclassified approximately $2.7 million of offering costs into shareholders' equity as a reduction of the net proceeds received from the IPO. As of September 30, 2025, there is approximately $563 thousand of unpaid offering costs.

Advertising Expense

The Company expenses advertising costs as they are incurred. Advertising expenses were approximately $621 thousand and $341 thousand for the three months ended September 30, 2025 and September 30, 2024, respectively, and $1.7 million and $1.2 million for the nine months ended September 30, 2025 and 2024, respectively.

Concentrations

For the three months ended September 30, 2025 and 2024, three and two suppliers accounted for approximately 84% and 77% of purchases respectively, and for the nine months ended September 30, 2025 and 2024, three and two suppliers accounted for approximately 88% and 85% of purchases, respectively.

Noncontrolling Interest

The noncontrolling interest balance represents the economic interests of LLC Units of Black Rock OpCo held by Continuing Equity Owners, based on the portion of LLC Units owned by the Continuing Equity Owners. Income or loss is attributed to the noncontrolling interest based on the weighted-average LLC Units outstanding during the period.

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BLACK ROCK COFFEE BAR, INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

For the Three and Nine Months Ended September 30, 2025 and 2024

Net Loss Per Share

Basic net loss per share is computed by dividing net loss attributable to Black Rock Coffee Bar, Inc. for the period following the IPO by the weighted-average number of shares of Class A common stock outstanding during the same period.

Diluted net loss per share is computed giving effect to all potential weighted-average dilutive shares for the period following the Transactions including LLC Units held by Continuing Equity Owners that are convertible into Class A common stock, stock options and RSUs for the period after the Transactions. The dilutive effect of outstanding awards, if any, is reflected in diluted earnings per share by application of the treasury stock method or if-converted method, as applicable.

Recent Accounting Pronouncements

Under the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"), the Company meets the definition of an emerging growth company. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the Company is no longer an emerging growth company or until the Company affirmatively and irrevocably opts out of the extended transition period. As a result, the Company's financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

Recently Issued Accounting Standards

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in the update are intended to enhance the transparency and decision usefulness of income tax disclosures, primarily through improvements to the rate reconciliation and income taxes paid information, specifically requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation, and (2) income taxes paid disaggregated by jurisdiction. These amendments are effective for public business entities’ annual periods beginning after December 15, 2024 and interim periods within fiscal years beginning after December 15, 2025, and should be applied on a prospective basis. Early adoption is permitted for annual financial statements that have not yet been issued. The Company is currently assessing the potential impacts of this standard on its income taxes disclosures and expects to provide additional detail and disclosures under the new guidance.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40). The intent of this ASU is to improve public entity financial footnote disclosures around types of expenses in commonly presented expense categories (i.e. cost of sales, selling, general and administrative expenses, and research and development). The amendments in this ASU do not change or remove current expense disclosure requirements, but rather 1) impact where this information appears in the notes to the consolidated financial statements and 2) add additional disclosure requirements for certain expense line items appearing on the face of the consolidated statement of operations. ASU 2024-03, as amended, is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company will assess potential impacts of this standard on its disclosures in future periods.

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BLACK ROCK COFFEE BAR, INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

For the Three and Nine Months Ended September 30, 2025 and 2024

Note 3 - Revenue Recognition


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2025		2024		2025		2024
Store revenue	$	51,410	$	41,399	$	146,520	$	117,941
Other	58		56		162		164
Total revenue	$	51,468	$	41,455	$	146,682	$	118,105

The Company’s gift card and loyalty program liability activity was as follows:


	Nine Months Ended September 30,
(in thousands)	2025		2024
Beginning balance	$	1,186	$	778
Revenue deferred - card activations and rewards earned	11,505		9,959
Revenue recognized - card and rewards redemptions and breakage	(11,375)		(9,920)
Ending balance	$	1,316	$	817

Note 4 - Supplemental Balance Sheet Information

The components of Receivables, net were as follows:



(in thousands)	September 30, 2025		December 31, 2024
Tenant improvement allowance receivables	$	4,710	$	4,103
Trade receivables	21		97
Other receivables	103		104
Receivables, net	$	4,834	$	4,304

The components of Inventories were as follows:


(in thousands)	September 30, 2025		December 31, 2024
Coffee beans and product inventory	$	2,326	$	1,613
Merchandise and supplies	182		207
Other	278		235
Inventories	$	2,786	$	2,055

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BLACK ROCK COFFEE BAR, INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

For the Three and Nine Months Ended September 30, 2025 and 2024

The components of Property and equipment, net were as follows:


(in thousands)	Estimated Useful Lives	September 30, 2025		December 31, 2024
Manufacturing equipment	3-7 years	$	32,652	$	27,476
Leasehold improvements	7-15 years	54,780		46,100
Buildings	15-39 years	9,997		7,267
Furniture and fixtures	5-7 years	10,255		8,210
Vehicles	5-7 years	482		482
Software	5 years	237		232
Construction in progress		11,306		4,834
Property and equipment, gross		119,709		94,601
Less accumulated depreciation		(31,988)		(24,612)
Property and equipment, net		$	87,721	$	69,989

Depreciation expense was approximately $2.5 million and $2.1 million for the three months ended September 30, 2025 and 2024, respectively, and was approximately $7.4 million and $5.8 million for the nine months ended September 30, 2025 and 2024, respectively, and is included in operating expenses in the condensed consolidated statements of operations.

Note 5 – Intangible Assets

The Company has intangible assets that are being amortized over 3 to 15 years consisting of the following:


(in thousands)	September 30, 2025		December 31, 2024
Reacquired franchise rights	$	13,504	$	13,504
Other intangible assets	3,215		2,959
Less accumulated amortization	(10,601)		(9,121)
Total intangible assets, net	$	6,118	$	7,342

Amortization expense in the condensed consolidated statements of operations was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2025		2024		2025		2024
Reacquired franchise rights	$	401	$	407	$	1,211	$	1,271
Other intangible assets	90		72		269		209

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BLACK ROCK COFFEE BAR, INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

For the Three and Nine Months Ended September 30, 2025 and 2024

Note 6 – Long-Term Debt



(in thousands)	September 30, 2025		December 31, 2024
Note payable to RCS SBIC Fund II, L.P and TCW Asset Management Company, LLC	$	—	$	92,614
Term loan with JPMorgan Chase Bank, N.A.	20,000		—
Less current portion	(1,250)		(925)
Less debt issuance costs	(1,135)		(769)
Less capitalized modification fees	—		(1,651)
Total long-term debt	$	17,615	$	89,269

Concurrently with the closing of the IPO, Black Rock OpCo entered into a new credit agreement (the "New Credit Agreement") with JPMorgan Chase Bank, N.A., as the administrative agent, and other loan parties and lenders party thereto to provide for (i) a $50.0 million term loan (the “New Term Loan”) and (ii) a $25.0 million revolving credit facility (the “New Revolving Credit Facility” and, together with the New Term Loan, the “New Credit Facilities”). As of the closing of the IPO, the aggregate principal amount borrowed under the New Credit Facilities was $50.0 million from the New Term Loan which was used, together with proceeds from the Co-Founder Contribution and net proceeds from the IPO, to repay all amounts outstanding under the Company's amended Senior Credit Facility with RCS SBIC Fund II, L.P. and TCW Asset Management Company, LLC (the "Prior Credit Facility"). The Company expensed the remaining $1.6 million of debt issuance costs and capitalized modification fees within other income (expense), net on the condensed consolidated statement of operations for the three and nine months ended September 30, 2025. Subsequent to the IPO the Company made a principal payment in the amount of $30.0 million, thereby reducing the outstanding balance of the New Term Loan as of September 30, 2025 to $20.0 million.

Pursuant to the New Credit Agreement, certain subsidiaries of Black Rock OpCo are guarantors of the obligations under the New Credit Agreement. Simultaneously with the execution of the New Credit Agreement, Black Rock OpCo and its subsidiaries entered into a pledge and security agreement. Pursuant to the pledge and security agreement, the New Credit Facilities are secured by liens on substantially all of the Company's assets, including the intellectual property of Black Rock OpCo and its subsidiaries and the equity interests of Black Rock OpCo's various subsidiaries.

The New Credit Agreement contains certain affirmative and negative covenants, including, among other things, restrictions on indebtedness, liens on assets, fundamental changes and asset sales, investments, negative pledges, repurchase of stock, dividends and other distributions, and transactions with affiliates. In addition, the New Credit Agreement also contains financial covenants that require the Loan Parties (as defined in the New Credit Agreement) to not exceed a maximum net rent adjusted leverage ratio for any period of four consecutive fiscal quarters ending on the last day of any fiscal quarter, commencing with the fiscal quarter ending December 31, 2025, of 4.75 to 1.00 and to maintain a minimum fixed charge coverage ratio for any period of four consecutive fiscal quarters ending on the last day of any fiscal quarter, commencing with the fiscal quarter ending December 31, 2025, of no less than 1.20 to 1.00.

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BLACK ROCK COFFEE BAR, INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

For the Three and Nine Months Ended September 30, 2025 and 2024

Borrowings under the New Credit Agreement are available as alternate base rate (“ABR”) or term benchmark loans. ABR loans under the New Credit Agreement accrue interest at an alternate base rate plus an applicable rate, and term benchmark loans accrue interest at an adjusted Secured Overnight Financing Rate ("SOFR") plus an applicable rate. The ABR rate represents the greatest of (i) the prime rate, (ii) the Federal Reserve’s Bank of New York overnight rate plus 0.5%, and (iii) the one-month adjusted term SOFR rate plus 1.0%. The applicable rate for the ABR and term benchmark loans is tied to a pricing grid tied to our net rent adjusted leverage ratio. The adjusted SOFR rate represents the term SOFR rate plus 0.10%. The applicable rate spread for ABR and term benchmark loans ranges from 0.50% to 1.75% and 1.50% to 2.75%, respectively. Interest on the New Credit Agreement is payable at least quarterly and upon maturity. As of September 30, 2025, the weighted-average interest rate on outstanding borrowings under the New Credit Facilities was 6.75%.

Borrowings under the Prior Credit Facility bore interest at either (a) the SOFR, plus 6.00%, plus a 0.50% spread or (b) the greatest of (i) 2.50% per annum, (ii) the Federal Funds Rate plus 0.5%, (iii) the Prime Rate, and (iv) the Adjusted Term SOFR Rate for a one-month tenor in effect on such date plus 1.0%, in each case, plus 5.00% and a 0.5% spread, with the amount of spread in both scenarios based on a pricing grid tied to the Company’s total net leverage ratio. As of December 31, 2024, the interest rate on outstanding borrowings was 11.82%.

The New Revolving Credit Facility also has a variable commitment fee, which is payable quarterly based on Black Rock OpCo's net rent adjusted leverage ratio and ranges from 0.25% to 0.35% per annum. The Company is obligated to pay a fixed fronting fee for letters of credit of 0.125% per annum.

Amounts borrowed under the New Revolving Credit Facility may be repaid and re-borrowed through maturity of the New Credit Facilities in September 2030. The New Term Loan matures in September 2030. The New Term Loan may be repaid or prepaid but may not be re-borrowed. Borrowings under the New Credit Agreement are payable in quarterly principal installments and upon maturity. The Company was in compliance with all financial covenants as of September 30, 2025.

Future principal maturities of long-term debt as of September 30, 2025 are as follows:



(in thousands)
Remainder of 2025	$	313
2026	1,563
2027	2,500
2028	2,812
2029	4,062
2030	8,750
Total	$	20,000

Interest expense, net in the condensed consolidated statements of operations was as follows:


	Three Months Ended September 30, 2025				Nine Months Ended September 30, 2025
(in thousands)	2025		2024		2025		2024
Interest expense	$	2,655	$	2,947	$	8,320	$	7,724
Amortization of debt issuance costs and capitalized modification fees	319		348		1,047		977
Interest income	(103)		(222)		(339)		(513)
Interest expense, net	$	2,871	$	3,073	$	9,028	$	8,188

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BLACK ROCK COFFEE BAR, INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

For the Three and Nine Months Ended September 30, 2025 and 2024

Note 7 – Leases

The Company leases its stores, roasting and warehouse facilities, and corporate offices under operating leases, typically with initial terms of 10 to 15 years.

The components of net lease costs, included in occupancy and related expenses, pre-opening costs as well as selling, general and administrative expenses in the condensed consolidated statement of operations, were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2025		2024		2025		2024
Operating lease cost	$	4,421	$	3,361	$	12,418	$	9,723
Variable lease cost	274		227		804		765
Less sublease income	(27)		(27)		(81)		(81)
Total lease cost	$	4,668	$	3,561	$	13,141	$	10,407

Supplemental cash flow information related to leases is as follows for the periods presented:


	Nine Months Ended September 30,
(in thousands)	2025		2024
Cash paid for amounts included in the measurement of operating lease liabilities	$	8,706	$	8,286
Operating lease right-of use-assets obtained in exchange for lease obligations	29,383		19,062

As of September 30, 2025, future minimum lease payments for operating leases consisted of the following:



Remainder of 2025	$	5,246
2026	15,328
2027	17,947
2028	17,516
2029	16,949
Thereafter	128,607
Total lease payments	201,593
Less imputed interest	(61,224)
Total operating lease liabilities	140,369
Less current portion	(7,873)
Total operating lease liability, net of current portion	$	132,496

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BLACK ROCK COFFEE BAR, INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

For the Three and Nine Months Ended September 30, 2025 and 2024

Note 8 - Shareholders' Equity

Amendment and Restatement of Certificate of Formation

On September 11, 2025, the Company amended and restated its certificate of formation to, among other things, provide for the authorization to issue four classes of stock, designated as follows:



Class of Stock	Authorized Shares	Par Value Per Share
Class A common stock	500,000,000	$0.00001
Class B common stock	200,000,000	$0.00001
Class C common stock	50,000,000	$0.00001
Preferred stock	20,000,000	$0.00001

Holders of Class A common stock are entitled to one vote per share, holders of Class B common stock are entitled to one vote per share, and holders of Class C common stock are entitled to 10 votes per share. All holders of outstanding shares of common stock will vote together as a single class on all matters on which shareholders are generally entitled to vote, except as otherwise required.

The Company has no current plans to pay dividends on Class A common stock. Holders of Class B and Class C common stock do not have any right to receive dividends (except for certain in-kind dividends), or to receive a distribution upon a liquidation, dissolution or winding up of the Company with respect to their Class B and Class C common stock. The declaration, amount and payment of any future dividends on shares of Class A common stock will be at the sole discretion of the Company's Board of Directors.

The Company must, at all times, maintain a one-to-one ratio between the number of outstanding shares of Class A common stock and the number of Black Rock OpCo LLC Units owned by the Company (subject to certain exceptions for treasury shares and shares underlying certain convertible or exchangeable securities).

LLC Recapitalization

As described in Note 1, on September 11, 2025, the Company entered into the Seventh Amended and Restated Limited Liability Company Agreement of Black Rock Coffee Holdings, LLC (the "Black Rock OpCo Agreement") to, among other things, effect a recapitalization (i) in which Black Rock OpCo recapitalized its capital structure to provide for a single new class of equity, LLC Units, (ii) in which Black Rock Coffee Bar, Inc. was appointed as the sole managing member of Black Rock OpCo and (iii) to provide certain redemption rights to the Continuing Equity Owners. Subsequent to the Transactions, 50,055,807 LLC Units were outstanding, of which 17,478,452 were held by the Company and the remaining 32,577,355 were held by the Continuing Equity Owners.

Pursuant to the Black Rock OpCo Agreement, the Continuing Equity Owners have the right, from time to time and subject to terms of the Black Rock OpCo Agreement, to exchange their LLC Units, along with a corresponding number of shares of Class B common stock or Class C common stock, as applicable, for shares of Class A common stock or cash, at the option of the Company, on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends, reclassification and similar transactions. The Company may not effectuate a cash settlement unless the disinterested directors of its Board of Directors have authorized and consummated a qualifying offering by no later than the redemption date for the purpose of satisfying such cash settlement. In connection with any exchange of LLC Units for shares of Class A common stock by a Continuing Equity Owner, the number of LLC Units held by the Company correspondingly increases as it acquires the exchanged LLC Units, and a corresponding number of shares of Class B or Class C common stock are canceled.

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BLACK ROCK COFFEE BAR, INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

For the Three and Nine Months Ended September 30, 2025 and 2024

Initial Public Offering

As described in Note 1, on September 15, 2025, the Company completed its IPO in which it issued and sold 16,911,764 shares of Class A common stock (including 2,205,882 shares sold pursuant to the full exercise of the underwriters option to purchase additional shares) at an offering price of $20.00 per share, resulting in proceeds of approximately $314.6 million, after deducting underwriting discounts and commissions. The proceeds were used to purchase approximately 3,857,642 newly-issued LLC Units from Black Rock OpCo for approximately $71.8 million, as well as 13,054,122 LLC Units from certain Continuing Equity Owners for $242.8 million. Total offering expenses (other than the underwriting discount and commissions) were approximately $8.0 million, resulting in net proceeds of $306.5 million. All of such offering expenses were paid for or otherwise borne by Black Rock OpCo.

As a result of the above transactions, as of September 30, 2025:

•Holders of the Company's Class A common stock owned 17,478,452 shares, representing a combined 7.0% of the voting power in the Company and, through the Company's corresponding ownership of LLC Units, 17,478,452 LLC Units representing a 34.9% interest in Black Rock OpCo; and

•the Continuing Equity Owners collectively owned 32,577,355 LLC Units, inclusive of 80.5 thousand restricted LLC Units, representing a 65.1% interest in Black Rock OpCo, 10,377,136 shares of the Company's Class B common stock, and 22,200,219 shares of the Company's Class C common stock, representing a combined 93.0% of the voting power in the Company.

Note 9 - Noncontrolling Interest

In connection with the completion of the Transactions, Black Rock Coffee Bar, Inc. became the sole managing member of Black Rock OpCo and as a result consolidated the results of operations of Black Rock OpCo. The noncontrolling interest balance represents the LLC Units held by the Continuing Equity Owners.

The following table summarizes the ownership interest in Black Rock OpCo as of September 30, 2025:


	September 30, 2025
(in thousands)	OpCo Units	Ownership %
LLC Units held by Black Rock Coffee Bar, Inc.	17,478	35.0	%
LLC Units owned by Continuing Equity Owners(1)	32,497	65.0	%
Total LLC Units outstanding(1)	49,975	100	%

(1)Excludes approximately 80.5 thousand restricted LLC Units still subject to time-based requirements.

The weighted-average ownership percentage for the applicable reporting period is used to attribute net income (loss) to Black Rock Coffee Bar, Inc. and the noncontrolling interest holders starting from the IPO close date. Net income (loss) prior to IPO close was allocated based on the respective ownership percentages at that time. The noncontrolling interest holders' weighted-average ownership percentage for the period from IPO close to September 30, 2025 was 65.0%.

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BLACK ROCK COFFEE BAR, INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

For the Three and Nine Months Ended September 30, 2025 and 2024

Note 10 - Equity-Based Compensation

Pre-IPO Incentive Plan

Prior to the IPO, certain employees and directors were granted profits interests units ("PI Units") in Black Rock OpCo which generally vested immediately upon a sale of the Company or an IPO. In connection with the Transactions, all outstanding PI Units were converted into LLC Units of Black Rock OpCo. The Company evaluated the conversion and exchange of PI Units as part of the Transactions and concluded the conversion and exchange was not a modification of the original PI Unit. Accordingly, the Company recognized equity-based compensation using the grant date fair value as measured on the original grant date of the PI Units which was determined to be immaterial. The unrecognized equity-based compensation for the restricted LLC Units still subject to time-based vesting requirement is immaterial.

2025 Incentive Award Plan

In September 2025, the Company's Board of Directors adopted the 2025 Incentive Award Plan (the "2025 Plan"), and the shareholders approved the 2025 Plan, effective in connection with the Company's IPO. The 2025 Plan provides for potential grants of the following awards with respect to shares of the Company's Class A common stock: (i) incentive stock options ("ISOs") qualified as such under U.S. federal income tax laws; (ii) non-qualified stock options ("NSOs"); (iii) stock appreciation rights; (iv) restricted stock awards; (v) dividend equivalents; (vi) RSUs, and (vii) other stock or cash-based awards as determined by the Board, the compensation committee of the Board or any properly delegated subcommittee.

The initial maximum aggregate number of shares of the Company's Class A common stock that may be issued pursuant to awards under the 2025 Plan shall not exceed 4,354,880 shares. In addition, the number of shares of our Class A common stock available for issuance under the 2025 Plan will be subject to an annual increase on the first day of each calendar year beginning on and including January 1, 2026 and ending on and including January 1, 2035, equal to (i) 3% of the aggregate number of shares of Class A common stock, Class B common stock and Class C common stock outstanding on the final day of the immediately preceding calendar year or (ii) such smaller number of shares of our Class A common stock as is determined by the Board. The maximum number of shares of the Company's Class A common stock that may be issued pursuant to the exercise of ISOs, granted under the 2025 Plan, is 10 million.

As of September 30, 2025, the Company had equity-based compensation awards outstanding consisting of RSUs and stock options.

Stock Options

In connection with the IPO, the Company granted employees stock options under the 2025 Plan to purchase shares of Class A common stock at an exercise price equal to the IPO price. The stock options will vest on September 15, 2028, subject to continued service through such date, which is the third anniversary of the date of the closing of the IPO. In addition, 381,097 stock options awarded to our Chief Executive Officer ("CEO") provide for accelerated vesting upon a qualified retirement event.

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BLACK ROCK COFFEE BAR, INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

For the Three and Nine Months Ended September 30, 2025 and 2024

The following table summarizes the stock option activity for the nine months ended September 30, 2025:


	Stock Options Outstanding	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2024	—
Granted	647,862	$	20.00
Forfeited or cancelled	—
Outstanding as of September 30, 2025	647,862	$	20.00	10.0	$	2,501

As of September 30, 2025, no options were vested or exercisable. The total unrecognized equity-based compensation related to the stock options was approximately $6.3 million which is expected to be recognized over a weighted-average period of 2.7 years.

The grant date fair value of the stock options was determined using the Black-Scholes model with the following assumptions:



Dividend yield(1)			None
Volatility(2)			48.3%
Risk-free interest rate(3)			4.03%
Expected term (years)(4)			5.5
Weighted-average grant date fair value per share			$9.84

(1) The Company utilized a dividend yield of zero, as it had no history or plan of declaring dividends on its common stock in the foreseeable future.

(2) Volatility was based on a group of industry peers with sufficient history.

(3) The risk-free interest rate is based on the implied yield currently available on U.S. Treasury issues with terms approximately equal to the expected life of the options.

(4) Because the Company does not yet have sufficient historical exercise data to provide a reasonable basis for estimating future exercise patterns, the expected term was based on an analysis of exercise behavior of peer companies and management's judgment.

RSUs

The Company has granted RSUs to employees and directors under the 2025 Plan. RSUs represent the right to receive shares of the Company's Class A common stock at a specified future date. RSUs under the 2025 Plan are generally subject to a service condition. The service condition for employees is generally satisfied over 4 years, whereby 25% of the RSUs vest on each annual anniversary of the closing the Company's IPO, subject to continued service through the applicable vesting date. The service condition for directors is generally satisfied on the date of the annual meeting of shareholders to be held in 2026, or, if earlier, the first anniversary of the closing of the IPO, subject to continued service through the applicable vesting date. In addition, 187,500 RSUs awarded to our CEO provide for accelerated vesting upon a qualified retirement event. The unrecognized equity-based compensation expense related to the RSUs will be recognized over the remaining requisite service period, using the straight-line attribution method.

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BLACK ROCK COFFEE BAR, INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

For the Three and Nine Months Ended September 30, 2025 and 2024

The activity for RSUs for the nine months ended September 30, 2025 was as follows:


	Number of RSUs	Weighted-Average Grant Date Fair Value
Nonvested at December 31, 2024	—
Granted	341,246	$	20.00
Forfeited or cancelled	—
Nonvested at September 30, 2025	341,246	$	20.00

As of September 30, 2025, unrecognized compensation cost related to RSUs, was approximately $6.7 million, which is expected to be recognized over a weighted-average period of 3.0 years.

Equity-Based Compensation


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2025		2024		2025		2024
Selling, general and administrative expenses	$	868	$	—	$	868	$	—

As of September 30, 2025, total unrecognized equity-based compensation related to unvested stock awards will be recognized as follows for the periods presented:


(in thousands)
Remainder of 2025	$	1,213
2026	4,676
2027	4,362
2028	2,254
2029	457
Total unrecognized equity-based compensation	$	12,962

Note 11 - Income Taxes and Tax Receivable Agreement

Black Rock Coffee Bar, Inc. is a Subchapter C corporation and is subject to federal and state income taxes. Black Rock Coffee Bar, Inc.'s sole material asset is its ownership interest in Black Rock OpCo, which is a limited liability company that is treated as a partnership for U.S. federal and certain state and local income tax purposes. Black Rock OpCo's net taxable income and related tax credits, if any, are passed through to its members and included in the members' tax returns. The income tax burden on the earnings taxed to the noncontrolling interest holders is not reported by the Company in its condensed consolidated financial statements under U.S. GAAP.

The Company's effective tax rate was (0.2)% and (1.4)% for the three and nine months ended September 30, 2025, respectively. The effective tax rate differs from our statutory rate in both periods due to the effect of flow-through entity income and losses for which the taxable income or loss is allocated to the noncontrolling interests.

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BLACK ROCK COFFEE BAR, INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

For the Three and Nine Months Ended September 30, 2025 and 2024

As of September 30, 2025, the Company recorded a deferred tax asset of $52.9 million. The deferred tax assets are due to the tax effects of temporary differences in the book basis as compared to the tax basis of Black Rock Coffee Bar, Inc.'s investment in Black Rock OpCo as a result of the IPO, reorganization transactions, the TRA and equity-based compensation. The Company recognizes deferred tax assets to the extent it believes these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent results of operations.

As each of the Continuing Equity Owners elects to convert their LLC Units into Class A common stock, Black Rock Coffee Bar, Inc. will assume their aggregate historical tax basis, which will create a net tax benefit for the Company. The Company will only recognize a deferred tax asset for financial reporting purposes when it is more-likely-than-not that the tax benefit will be realized.

In connection with Transactions, the Company entered into a TRA with Black Rock OpCo and Continuing Equity Owners that provides for the payment by Black Rock Coffee Bar, Inc. to the Continuing Equity Owners of 85% of the amount of tax benefits, if any, that Black Rock Coffee Bar, Inc. realizes (or in some circumstances is deemed to realize) related to the tax basis adjustments.

The purchase of 13,054,122 LLC Units from the Continuing Equity Owners triggered a tax basis increase subject to the provisions of the TRA. On September 15, 2025, the date of the purchase, the Company recognized (i) a deferred tax asset in the amount of $52.6 million, (ii) a corresponding estimated tax receivable agreement liability of $40.6 million to the Continuing Equity Owners representing 85% of the projected tax benefits, and (iii) $12.0 million of additional paid-in capital.

Note 12 - Net Loss Per Share

Prior to the IPO, the Black Rock OpCo membership structure included common units, redeemable Series A Preferred Units, Series A-1 Preferred Units, Series A-2 Preferred Units, and PI Units. The Company analyzed the calculation of net income (loss) per unit for the periods prior to the IPO and determined that it resulted in values that would not be meaningful to the users of the condensed consolidated financial statements. Therefore, net income (loss) per unit information has not been presented for the three and nine months ended September 30, 2024.

The following tables set forth reconciliations of the numerators and denominators used to compute basic and diluted net income (loss) per share of Class A common stock for the three and nine months ended September 30, 2025. The basic and diluted loss per share period for the three and nine months ended September 30, 2025 reflects only the period from September 12, 2025, to September 30, 2025, which represents the period from the IPO date during which the Company had outstanding Class A common stock.


(in thousands)	Three months ended September 30, 2025		Nine months ended September 30, 2025
Numerator:
Net loss	$	(16,175)	$	(18,120)
Less: net loss attributable to Black Rock OpCo prior to the Transactions	(14,432)		(16,377)
Less: net loss attributable to noncontrolling interests	(1,031)		(1,031)
Net loss attributable to Black Rock Coffee Bar, Inc.	$	(712)	$	(712)

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BLACK ROCK COFFEE BAR, INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

For the Three and Nine Months Ended September 30, 2025 and 2024


(in thousands, except share and per share amounts)	Three months ended September 30, 2025		Nine months ended September 30, 2025
Basic net loss per share attributable to Class A common shareholders
Numerator:
Net loss attributable to Black Rock Coffee Bar, Inc.	$	(712)	$	(712)
Denominator:
Weighted-average number of shares of Class A common stock outstanding	14,808,173		14,808,173
Basic net loss per share attributable to Class A common shareholders	$	(0.05)	$	(0.05)

Diluted net loss per share attributable to Class A common shareholders
Numerator:
Net loss attributable to Black Rock Coffee Bar, Inc.	$	(712)	$	(712)
Diluted net loss attributable to Black Rock Coffee Bar, Inc.	$	(712)	$	(712)
Denominator:
Weighted-average number of shares of Class A common stock outstanding used to calculated diluted net loss per share	14,808,173		14,808,173
Diluted net loss per share attributable to Class A common shareholders	$	(0.05)	$	(0.05)

The following Class A common share equivalents were excluded from diluted net loss per share in the periods presented because they were anti-dilutive:


	Three months ended September 30, 2025	Nine months ended September 30, 2025
Stock options	647,862	647,862
RSUs	341,246	341,246
LLC Units	32,577,355	32,577,355
Total anti-dilutive securities	33,566,463	33,566,463

Shares of the Company's Class B and Class C common stock do not participate in income or losses of Black Rock Coffee Bar, Inc. and are therefore are not participating securities. As such, separate presentation of basic and diluted net income (loss) per share of Class B and Class C common stock under the two-class method has not been presented.

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BLACK ROCK COFFEE BAR, INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

For the Three and Nine Months Ended September 30, 2025 and 2024

Note 13 - Series A Preferred Units

On May 31, 2024, in conjunction with the execution of the Sixth Amended and Restated LLC Agreement (the “LLC Agreement”) the Company entered into a redemption agreement (the “Series A Redemption Agreement”) with the holders (“Series A Unitholders”) of the Company’s Series A Preferred Units (the “Series A Units”) to purchase all of the 19,974,660 outstanding Series A Units for an aggregate purchase price of $18.0 million, as soon as such purchase and redemption of the Series A Units is permitted by the Prior Credit Facility. Under the Series A Redemption Agreement 16,169,962 Series A Units were purchased for approximately $14.6 million in 2024. In April 2025, the Company purchased the remaining outstanding Series A Units for $3.4 million. For the three and nine months ended September 30, 2024 the Company recognized approximately $714 thousand in fees associated with the purchase. For the nine months ended September 30, 2025, the Company recognized approximately $1.1 million in fees associated with the purchase. Both amounts are reported within other income (expense), net in the condensed consolidated statement of operations.

Note 14 - Related Party Transactions

During 2023, the Company entered into a note receivable with Viking Cake BR, LLC (“Viking Cake”), which is owned by certain of the Company’s board members and beneficial owners, totaling approximately $4.9 million, including accrued interest at a per annum rate of 3.57%. Payment of this note is due upon the fifth anniversary with an option to pay early at the members’ election. On May 31, 2024, the Company and Viking Cake entered into an amendment to the promissory note pursuant to which the maturity date of the note was amended to the earlier of (a) May 8, 2030, (b) the initial public offering of the Company or a successor company, (c) a Sale Event as defined under the LLC Agreement and (d) the date on which all amounts under the promissory note become due and payable pursuant to an event of default under the note. As of December 31, 2024, the carrying value recorded on the condensed consolidated balance sheets was approximately $5.2 million. In August of 2025, the Company forgave the full amount of the note receivable with Viking Cake and recorded the expense in other income (expense), net in the condensed consolidated statement of operations for the three and nine months ended September 30, 2025.

Too Sweet Cakes, LLC (“Too Sweet”), an Oregon bakery, offers a selection of their baked goods exclusively at certain of the Company’s stores. Shelbi Geyer, the wife of Clay Geyer, the Company’s Chief Operating Officer, and Viking Cake and its affiliates, a beneficial owner of the Company, are owners of and investors in Too Sweet. For the three months ended September 30, 2025 and 2024, the Company made purchases from Too Sweet of $1.6 million and $1.3 million, respectively, and made purchases from Too Sweet of approximately $4.9 million and $3.8 million for the nine months ended September 30, 2025 and 2024.

On May 31, 2024, the Company entered into the Series A Redemption Agreement to purchase the remaining Series A Preferred Units from certain members of the Company. See Note 13 for further details.

Note 15 – Commitments and Contingencies

The Company is subject to various legal actions in the ordinary course of business. In determining loss contingencies, the Company considers the likelihood of loss as well as the ability to reasonably estimate the amount of such loss or liability. An estimated loss is recognized when it is considered probable that the liability has been incurred and when the amount of loss can be reasonably estimated. While any claim, proceeding or litigation has an element of uncertainty, the Company believes the outcome of any of these matters that are pending or threatened will not have a material adverse effect on its financial condition, results or operations, or cash flows as of September 30, 2025.

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BLACK ROCK COFFEE BAR, INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

For the Three and Nine Months Ended September 30, 2025 and 2024

Note 16 – Segment Reporting

The Company uses the management approach for determining its reportable segments. The management approach is based upon the way that management reviews performance and allocates resources.

The Company’s chief operating decision-maker (the “CODM”) is its CEO. The Company has one operating and one reportable segment, as the CODM allocates resources and regularly reviews operations and financial performance at a consolidated level. The CODM uses consolidated net income to allocate resources for the single segment to make decisions regarding annual budget, new store openings, marketing decisions and driving the Company’s mission. The measure of the single reportable segment’s assets is reported as Total assets on the condensed consolidated balance sheets.

No changes have been made to the Company’s segment during the nine months ended September 30, 2025. In addition, no customer represented 10% or more of total revenue for the three or nine months ended September 30, 2025 and 2024.

Financial information for the Company’s reportable segment is as follows (in thousands):


	Three Months Ended September 30, 2025				Nine Months Ended September 30,
	2025		2024		2025		2024
Segment revenue	$	51,468	$	41,455	$	146,682	$	118,105
Less:
Beverage, food and packaging costs	14,286		11,719		41,641		33,977
Labor and related expenses	10,785		9,220		30,588		25,722
Occupancy and related expenses	4,034		3,229		11,641		9,644
Other store operating expenses(1)	7,079		5,578		19,883		15,398
Selling, general and administrative expenses	17,158		4,894		31,898		17,457
Depreciation and amortization	3,030		2,533		8,856		7,334
Pre-opening costs	1,503		1,144		3,064		2,428
Interest expense, net	2,871		3,073		9,028		8,188
Other expense (income), net	6,866		716		7,950		717
Income tax expense	31		71		253		197
Segment loss	(16,175)		(722)		(18,120)		(2,957)
Reconciliation of profit or loss
Adjustments and reconciling items	—		—		—		—
Consolidated net loss	$	(16,175)	$	(722)	$	(18,120)	$	(2,957)

(1)Other store operating expenses consists of credit card fees, repairs and maintenance, utilities, software subscriptions, property taxes, and other operating expenses, incidental to operating the Company’s stores, such as store supplies, insurance, business permits, and travel expense.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited interim condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q ("Form 10-Q"), and audited consolidated financial statements included in our final prospectus filed with the SEC on September 15, 2025 pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended (the “Prospectus”). In addition to historical information, this discussion and analysis contains forward-looking statements based on current expectations that involve risks, uncertainties, and other factors outside the Company’s control, as well as assumptions, such as our plans, objectives, expectations, and intentions. Our actual results may differ materially from those expressed or implied in the forward-looking statements as a result of various factors, including those described under the sections entitled “Forward-Looking Statements” above and “Risk Factors” elsewhere in this Form 10-Q, in the Prospectus and our other filings with the SEC.

Overview

We are a high-growth operator of guest-centric, drive-thru coffee bars offering premium caffeinated beverages and an elevated in-store experience crafted by our engaging baristas. Black Rock Coffee Bar was founded in 2008 in Beaverton, Oregon, by our co-founders Daniel Brand and Jeff Hernandez. What started as a single 160 square foot coffee bar in 2008 is now one of the fastest growing beverage companies in the United States by revenue and the largest fully company-owned coffee retailer in the country, with 169 locations spanning seven states as of September 30, 2025, from the Pacific Northwest to Texas.

We were founded as a drive-thru only concept and evolved to include engaging seating areas, which we call “lobbies.” All of our locations include efficient drive-thrus and approximately 75% of our locations include lobbies as of September 30, 2025. We expect most of our new locations to include both drive-thrus and lobbies as we continue to grow. Our modern, inviting store formats—paired with a robust digital platform—allow us to deliver a dynamic and multi-faceted guest experience.

Driven by a passion for Connection, Caffeine, and Community, Black Rock is a platform to do well by our baristas, guests, and the communities we serve. With a relentless focus on people and excellence, our culture has been key to our success.

These results demonstrate the strength and consistency of our model and highlight our genuine connection to our guests across diverse markets.

Initial Public Offering and Related Transactions

Black Rock Coffee Bar, Inc. was originally incorporated as a Delaware corporation on May 2, 2025 and in June 2025 re-domiciled to be incorporated in Texas for the purposes of facilitating an initial public offering. On September 15, 2025, we completed our IPO in which we issued and sold 16,911,764 shares of Class A common stock (including 2,205,882 shares sold pursuant to the full exercise of the underwriters option to purchase additional shares) at an offering price of $20.00 per share, resulting in net proceeds of approximately $306.5 million after deducting underwriting discounts, commissions and offering expenses. Black Rock Coffee Bar, Inc. used the net proceeds from the IPO to: (i) purchase 3,857,642 newly issued LLC Units for approximately $71.8 million directly from Black Rock OpCo; and (ii) purchase 13,054,122 LLC Units from certain Continuing Equity Owners for approximately $242.8 million, each at a price per unit equal to the IPO price per share of Class A common stock less the underwriting discount.

For additional information related to our IPO and the Transactions, see "The Transactions" in the forepart of this Form 10-Q, “—Liquidity and Capital Resources—IPO and Related Transactions” in this Part I, Item 2 as well as Note 1, Note 6 and Note 8 to the unaudited condensed consolidated financial statements elsewhere in this Form 10-Q.

Growth Strategies and Outlook

With 169 stores as of September 30, 2025, we believe we are well-positioned to take advantage of significant growth opportunities due to our clear and consistent focus on creating authentic connections between baristas and guests, delivered through premium caffeinated beverages in modern, welcoming environments. We plan to expand our business by executing on the following growth strategies:

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•Expanding Our Store Footprint in New and Existing Markets – We are in the early stages of our long-term growth journey, with significant whitespace in both existing and new markets. We have a robust pipeline for development to support future anticipated growth. We expect to open approximately 30 stores in 2025 and expect our future average annual store growth to be consistent with our approximately 20% historical average annual store growth from 2020 through 2024. We believe that we can achieve 1,000 stores by 2035, with ample whitespace in our existing markets to support this growth.

•Continuous Menu Innovation – Menu innovation is core to our brand. We regularly develop new offerings in partnership with our team and community in an effort to ensure our menu is relevant and exciting. Each seasonal marketing window provides an innovative coffee-based offering that highlights our commitment to our coffee forward culture.

•Building Loyalty Through Our Differentiated Tech-Enabled Approach – We continue to invest in technology that supports human connection. Our mobile application and loyalty program streamline service while enabling personalized marketing and data-driven insights.

◦Digital – At approximately 16% of store revenue for the three months ended September 30, 2025, our digital strategy is still in its early stages. Mobile orders reduce wait times, increase throughput, and showcase trending items in-store and in-app.

◦Loyalty – Since launching in June 2024, we have seen guests visit more often following their enrollment into our loyalty program (based on a review of the transaction history of approximately 1,200 loyalty members in the 90 days before and after joining the loyalty program). This behavior drives higher frequency and larger check sizes.

•Fueling Brand Growth – Every new Black Rock location deepens brand visibility and introduces more guests to our Fuel Your Story philosophy. Our consistent, friendly barista interactions, premium beverages, and fast service turn each store into a medium for future connections.

◦Local Community Engagement – As we expand, we tailor our outreach efforts to local markets. Our baristas actively engage in their communities, helping to build trust and familiarity. In 2025, we have provided support to over 200 local businesses and high schools through donations, including gift cards and drinks, continuing our commitment to strengthening the communities we serve.

◦Growing Our Social Community – Our enthusiastic, growing fan base engages with Black Rock across social channels, and we meet them with timely content, branded moments, and community storytelling.

◦Exclusive Products – Our in-house Fuel line and other branded items, such as our K-Cup pods, custom blend roasted beans, and cold brew bags offer powerful brand touchpoints. This keeps Black Rock top of mind whether guests are in-store or on the go.

•Leverage Infrastructure – Our investments in people, facilities, and technology have built a strong foundation for scalable growth.

◦People-First Organization – With strong internal promotion practices and new key hires across functions, we are building a leadership bench ready to support expansion. Our team-first culture keeps us aligned as we grow.

◦Roasting Facilities – Our two roasting centers ensure freshness, consistency, and capacity to support national growth.

◦Supply Chain – A robust distribution network supports multi-state operations and helps us deliver high-quality products at scale.

◦Technology Infrastructure – We have built an integrated digital platform that supports everything from inventory control to real-time sales tracking and predictive scheduling. These systems help to reduce waste, control prime costs, and streamline daily operations.

◦Product Innovation – Our exclusive Fuel energy drinks were developed in-house, allowing us to capture greater margins and offer unique products that differentiate us in the market.

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Key Performance Measures and Non-GAAP Financial Measures

In assessing the performance of our business, in addition to considering a variety of measures in accordance with GAAP, our management team also considers a variety of key performance measures and non-GAAP financial measures. The key performance measures and non-GAAP financial measures used by our management to evaluate our performance are: Total Stores (End of Period), Net New Store Openings, Same Store Sales Growth, Average Unit Volume, Store revenue, Store-Level Profit, Store-Level Profit Margin, Adjusted EBITDA and Adjusted EBITDA Margin.

We believe that these measures provide useful information to users of our financial statements in understanding and evaluating our results of operations in the same manner as our management team. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. See “Non-GAAP Financial Measures” below.

The following table sets forth our key performance measures for the periods presented:


	Three Months Ended September 30,									Nine Months Ended September 30,
($ in thousands)	2025			2024			Change			2025			2024			Change
Total Stores (End of Period)	169			144			25			169			144			25
Net New Store Openings	11			7			4			20			19			1
Same Store Sales Growth(1)	10.8		%	8.6		%	2.2		%	10.3		%	5.2		%	5.1		%
Average Unit Volume	$	1,260		$	1,168		$	92		$	1,260		$	1,168		$	92
Store revenue	$	51,410		$	41,399		$	10,011		$	146,520		$	117,941		$	28,579
Income (loss) from operations(3)	$	(6,407)		$	3,138		$	(9,545)		$	(889)		$	6,145		$	(7,034)
Income (loss) from operations margin(3)	(12.4)		%	7.6		%	(20.0)		%	(0.6)		%	5.2		%	(5.8)		%
Store-Level Profit(2)	$	15,226		$	11,653		$	3,573		$	42,767		$	33,200		$	9,567
Store-Level Profit Margin(2)	29.6		%	28.1		%	1.5		%	29.2		%	28.1		%	1.1		%
Net loss(3)	$	(16,175)		$	(722)		$	(15,453)		$	(18,120)		$	(2,957)		$	(15,163)
Net loss margin(3)	(31.4)		%	(1.7)		%	(29.7)		%	(12.4)		%	(2.5)		%	(9.9)		%
Adjusted EBITDA(2)	$	6,922		$	5,122		$	1,800		$	20,985		$	15,920		$	5,065
Adjusted EBITDA Margin(2)	13.4		%	12.4		%	1.0		%	14.3		%	13.5		%	0.8		%

(1)Same Store Sales Growth reflects the change in year-over-year sales for the comparable store base, which we define as stores open for 18 months or longer.

(2)See “Non-GAAP Financial Measures” for a discussion of Store-Level Profit, Store-Level Profit Margin, Adjusted EBITDA and Adjusted EBITDA margin and reconciliation of each measure to its most directly comparable GAAP measure.

(3)The Company does not consider income (loss) from operations, income (loss) from operations margin, net loss or net loss margin to be key performance measures but has included such metrics in this table to provide the most directly comparable GAAP metric to Store-Level Profit, Store-Level Profit Margin, Adjusted EBITDA and Adjusted EBITDA Margin.

Net New Store Openings

Net New Store Openings reflect the number of stores opened during a particular reporting period, net of any permanent store closures during the same period. Before we open new stores, we incur pre-opening costs as described below. The opening of new stores has been and is expected to continue to be the primary driver of revenue growth. The total number of new store openings has, and will continue to have, an impact on our results of operations.

Same Store Sales Growth

Same Store Sales Growth is defined as the period-over-period sales comparison for stores in our comparable store base, which we define as stores that have been open for 18 months or longer. We use Same Store Sales Growth to assess the performance of existing stores that have been open for 18 months or longer, as the impact of new store openings is excluded.

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As of September 30, 2025 and 2024, there were 134 stores and 108 stores, respectively, in our comparable store base.

Average Unit Volume

AUV represents total trailing twelve-month store revenue of operating stores in the comparable store base, divided by the number of stores in the comparable store base. We use AUV to assess and understand changes in spending patterns and overall performance. AUV is impacted by changes in guest traffic and the number of newer stores that are included in calculating AUVs.

Store revenue

Store revenue represents all revenue attributable to our stores in the specified period. We use store revenue to evaluate and track the aggregate beverage and food sales in our stores. Several factors affect store revenue in any given period, including number of stores open, same store sales and guest traffic.

Store-Level Profit and Store-Level Profit Margin

Store-Level Profit represents store revenue in the specific period less beverage, food and packaging, labor and related expenses, occupancy and related expenses, and other store operating expenses, excluding depreciation and amortization and pre-opening costs in the period.

Store-Level Profit Margin represents Store-Level Profit as a percentage of store revenue. We use Store-Level Profit and Store-Level Profit Margin in our evaluation of the performance and profitability of each store.

We use Store-Level Profit and Store-Level Profit Margin to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, and to compare our performance against that of other peer companies using similar measures. See “Non-GAAP Financial Measures” below for our reconciliation of Store-Level Profit to income from operations and Store-Level Profit Margin to income from operations margin.

Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA is net loss adjusted to exclude interest expense, net, income tax expense, and depreciation and amortization, further adjusted to exclude certain items that we do not consider indicative of our ongoing operating performance, including transaction costs associated with our IPO, capital restructuring costs, equity-based compensation, certain litigation costs, net, point-of-sale system transition costs and other non-core costs. Adjusted EBITDA Margin is Adjusted EBITDA as a percentage of Total revenue. We use Adjusted EBITDA and Adjusted EBITDA Margin to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, and to compare our performance against that of other peer companies using similar measures. See “Non-GAAP Financial Measures” below for our reconciliation of Adjusted EBITDA to net loss and Adjusted EBITDA Margin to net loss margin.

Components of Results of Operations

Store revenue represents the aggregate sales of beverages and food, net of discounts at our stores and gift card and loyalty breakage income.

Other includes sales of online retail products, net of discounts, and other non-store revenue.

Store Operating costs and expenses

Our store operating costs and expenses consist of (i) beverage, food and packaging costs, (ii) labor and related expenses, (iii) occupancy and related expenses and (iv) other store operating expenses.

Beverage, food and packaging costs consists primarily of beverage, food and packaging costs, including manufacturing costs and costs associated with our production facilities. The components of beverage, food and packaging costs are variable by nature, change with sales volume, are impacted by menu mix and subject to increases or decreases in commodity costs.

Labor and related expenses includes all store-level management and hourly labor costs, including salaries, wages, benefits, bonuses, payroll taxes and other indirect labor costs. Factors that influence labor costs include the minimum wage in the jurisdictions in which we operate, payroll tax legislation, inflation, the strength of the

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labor market for hourly team members, benefit costs, health care costs, and the number, size, and location of stores.

Occupancy and related expenses consists of store-level occupancy including rent, common area expenses, real estate and other taxes. Occupancy excludes expenses associated with unopened stores, which are recorded in pre-opening costs. Occupancy varies from location to location and is impacted by macroeconomic conditions, including inflation.

Other store operating expenses includes credit card fees, repairs and maintenance, utilities, software subscriptions, property taxes, and other operating expenses, incidental to operating our stores, such as store supplies, insurance, business permits and travel expense.

Selling, general and administrative expenses includes expenses associated with our corporate function that supports the development and operation of stores, including compensation and benefits, equity-based compensation, insurance, professional fees, technology support, travel expenses, certain marketing and advertising costs, and other costs related to our corporate offices and support teams.

Depreciation and amortization consists of depreciation of fixed assets including all equipment and leasehold improvements and amortization of intangible assets such as reacquired franchise rights and trademarks.

Pre-opening costs consists of grand opening expenses and start-up and promotional costs incurred prior to opening a new store and are made up of labor, relocation costs, supplies, recruiting expenses, payroll and training costs, travel costs and marketing costs. Pre-opening costs also include occupancy costs recorded during the period between the date of possession and the date we begin operations at a location. Pre-opening costs are expensed as incurred.

Interest expense, net includes cash and non-cash charges related to our Prior Credit Facility and New Credit Facilities, including the amortization of debt issuance costs and loan modification fees, net of capitalized interest associated with borrowings related to eligible capital expenditures and interest income earned on our related party note receivable and cash and cash equivalents.

Other (income) expense, net consists of miscellaneous income and expenses.

Income tax expense consists of federal and state current and deferred income tax expense.

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Results of Operations

Comparison of the three months ended September 30, 2025 and 2024

The following table summarizes our results of operations for the periods presented below:


	Three Months Ended September 30,				Change
($ in thousands)	2025		2024		$		%
Store revenue	$	51,410	$	41,399	$	10,011	24.2	%
Other	58		56		2		3.6	%
Total revenue	51,468		41,455		10,013		24.2	%
Store operating costs and expenses (exclusive of depreciation and amortization presented separately below):
Beverage, food and packaging costs	14,286		11,719		2,567		21.9	%
Labor and related expenses	10,785		9,220		1,565		17.0	%
Occupancy and related expenses	4,034		3,229		805		24.9	%
Other store operating expenses	7,079		5,578		1,501		26.9	%
Total store operating costs and expenses	36,184		29,746		6,438		21.6	%
Selling, general and administrative expenses	17,158		4,894		12,264		250.6	%
Depreciation and amortization	3,030		2,533		497		19.6	%
Pre-opening costs	1,503		1,144		359		31.4	%
Total operating expenses	57,875		38,317		19,558		51.0	%
Income (loss) from operations	(6,407)		3,138		(9,545)		(304.2)	%
Interest expense, net	(2,871)		(3,073)		202		(6.6)	%
Other income (expense), net	(6,866)		(716)		(6,150)		858.9	%
Loss before income taxes	(16,144)		(651)		(15,493)		2379.9	%
Income tax expense	31		71		(40)		(56.3)	%
Net loss	$	(16,175)	$	(722)	$	(15,453)	2140.3	%

Store revenue

Store revenue increased $10.0 million, or 24.2%, to $51.4 million for the three months ended September 30, 2025, compared to $41.4 million for the three months ended September 30, 2024. The increase in store revenue was primarily driven by 25 Net New Store Openings subsequent to September 30, 2024, which contributed $4.6 million, as well as 10 stores opened prior to September 30, 2024 that are not yet in the comparable store base, which contributed $860.3 thousand. The remainder of the increase was primarily driven by Same Store Sales Growth of 10.8%, which contributed $4.2 million, which consists of 5.0%, or $1.9 million, from menu price increases and product mix, and 6.1%, or $2.4 million, from increased traffic, partially offset by a decrease of 0.3%, or $126.6 thousand, as a result of higher discounting for the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

Other

Other remained relatively flat and increased $2.0 thousand, or 3.6%, to $58.0 thousand for the three months ended September 30, 2025, compared to $56.0 thousand for the three months ended September 30, 2024.

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Beverage, food and packaging costs


	Three Months Ended September 30,						Change
($ in thousands)	2025			2024			$		%
Beverage, food and packaging costs	$	14,286		$	11,719		$	2,567	21.9	%
As a percentage of Total revenue	27.8		%	28.3		%	n/a		(0.5)	%

Beverage, food and packaging costs increased $2.6 million, or 21.9%, to $14.3 million for the three months ended September 30, 2025, compared to $11.7 million for the three months ended September 30, 2024. The increase in beverage, food and packaging costs was primarily driven by 25 Net New Store Openings subsequent to September 30, 2024, which contributed approximately $1.3 million of incremental expense, as well as increased traffic at stores in the comparable store base.

As a percentage of total revenue, beverage, food and packaging costs decreased for the three months ended September 30, 2025 primarily due to menu price increases, improvements in operating efficiencies, and volume pricing efficiencies driven by greater economies of scale as we continued to expand our store footprint.

Labor and related expenses


	Three Months Ended September 30,						Change
($ in thousands)	2025			2024			$		%
Labor and related expenses	$	10,785		$	9,220		$	1,565	17.0	%
As a percentage of Total revenue	21.0		%	22.2		%	n/a		(1.2)	%

Labor and related expenses increased $1.6 million, or 17.0%, to $10.8 million for the three months ended September 30, 2025, compared to $9.2 million for the three months ended September 30, 2024. The increase in labor and related expenses was primarily driven by 25 Net New Store Openings subsequent to September 30, 2024, which contributed approximately $1.1 million in incremental expense, as well as an increase in prevailing wage rates in many of our markets and increased traffic at stores in the comparable store base.

As a percentage of total revenue, labor and related expenses decreased for the three months ended September 30, 2025 primarily due to menu price increases to offset increases in prevailing wage rates, our ongoing efforts to improve employee retention and operational efficiency.

Occupancy and related expenses


	Three Months Ended September 30,						Change
($ in thousands)	2025			2024			$		%
Occupancy and related expenses	$	4,034		$	3,229		$	805	24.9	%
As a percentage of Total revenue	7.8		%	7.8		%	n/a		—	%

Occupancy and related expenses increased $805 thousand, or 24.9%, to $4.0 million for the three months ended September 30, 2025, compared to $3.2 million for the three months ended September 30, 2024. The increase in occupancy and related expenses was primarily due to 25 Net New Store Openings subsequent to September 30, 2024, which contributed approximately $578.1 thousand in incremental expense.

Other store operating expenses


	Three Months Ended September 30,						Change
($ in thousands)	2025			2024			$		%
Other store operating expenses	$	7,079		$	5,578		$	1,501	26.9	%
As a percentage of Total revenue	13.8		%	13.5		%	n/a		0.3	%

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Other store operating expenses increased $1.5 million, or 26.9%, to $7.1 million for the three months ended September 30, 2025, compared to $5.6 million for the three months ended September 30, 2024. The increase in other store operating expenses was primarily driven by higher delivery commissions and merchant processing fees associated with increased sales and transaction volumes, which contributed approximately $713.2 thousand of incremental expense, and increased operating costs associated with 25 Net New Store Openings subsequent to September 30, 2024.

Selling, general and administrative expenses


	Three Months Ended September 30,						Change
($ in thousands)	2025			2024			$		%
Selling, general and administrative expenses	$	17,158		$	4,894		$	12,264	250.6	%
As a percentage of Total revenue	33.3		%	11.8		%	n/a		21.5	%

Selling, general, and administrative expenses increased $12.3 million, or 250.6%, to $17.2 million for the three months ended September 30, 2025, compared to $4.9 million for the three months ended September 30, 2024. The increase in selling, general, and administrative expenses was primarily driven by $9.0 million of IPO-related expenses. The remainder of the increase was primarily driven by a $867.8 thousand increase in equity-based compensation.

Depreciation and amortization


	Three Months Ended September 30,						Change
($ in thousands)	2025			2024			$		%
Depreciation and amortization	$	3,030		$	2,533		$	497	19.6	%
As a percentage of Total revenue	5.9		%	6.1		%	n/a		(0.2)	%

Depreciation and amortization increased $497.0 thousand, or 19.6%, to $3.0 million for the three months ended September 30, 2025, compared to $2.5 million for the three months ended September 30, 2024. The increase in depreciation and amortization was primarily driven by 25 Net New Store Openings subsequent to September 30, 2024.

Pre-opening costs


	Three Months Ended September 30,						Change
($ in thousands)	2025			2024			$		%
Pre-opening costs	$	1,503		$	1,144		$	359	31.4	%
As a percentage of Total revenue	2.9		%	2.8		%	n/a		0.1	%

Pre-opening costs increased $359.0 thousand, or 31.4%, to $1.5 million for the three months ended September 30, 2025, compared to $1.1 million for the three months ended September 30, 2024. The increase in pre-opening costs was primarily a result of 4 incremental Net New Store Openings for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

Interest expense, net

Interest expense, net decreased $202.0 thousand, or 6.6%, to $2.9 million for the three months ended September 30, 2025, compared to $3.1 million for the three months ended September 30, 2024. The decrease in interest expense, net was primarily driven by repaying all outstanding borrowings under the Prior Credit Facility and entering into the New Credit Facilities, which carry a lower interest rate and less outstanding borrowings when compared to the Prior Credit Facility.

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Other income (expense), net

The increase in other expense, net to $6.9 million for the three months ended September 30, 2025 from $716.0 thousand for the three months ended September 30, 2024 was primarily driven by $5.3 million in expense incurred in connection with the forgiveness of our related party note receivable and a $1.6 million debt extinguishment charge incurred during the three months ended September 30, 2025.

Income tax expense

Income tax expense was an immaterial amount for each of the three months ended September 30, 2025 and 2024.

Comparison of the nine months ended September 30, 2025 and 2024

The following table summarizes our results of operations for the periods presented below:


	Nine months ended September 30, 2025				Change
($ in thousands)	2025		2024		$		%
Store revenue	$	146,520	$	117,941	$	28,579	24.2	%
Other	162		164		(2)		(1.2)	%
Total revenue	146,682		118,105		28,577		24.2	%
Store operating costs and expenses (exclusive of depreciation and amortization presented separately below):
Beverage, food and packaging costs	41,641		33,977		7,664		22.6	%
Labor and related expenses	30,588		25,722		4,866		18.9	%
Occupancy and related expenses	11,641		9,644		1,997		20.7	%
Other store operating expenses	19,883		15,398		4,485		29.1	%
Total store operating costs and expenses	103,753		84,741		19,012		22.4	%
Selling, general and administrative expenses	31,898		17,457		14,441		82.7	%
Depreciation and amortization	8,856		7,334		1,522		20.8	%
Pre-opening costs	3,064		2,428		636		26.2	%
Total operating expenses	147,571		111,960		35,611		31.8	%
Income (loss) from operations	(889)		6,145		(7,034)		(114.5)	%
Interest expense, net	(9,028)		(8,188)		(840)		10.3	%
Other income (expense), net	(7,950)		(717)		(7,233)		1,008.8	%
Loss before income taxes	(17,867)		(2,760)		(15,107)		547.4	%
Income tax expense	253		197		56		28.4	%
Net loss	$	(18,120)	$	(2,957)	$	(15,163)	512.8	%

Store revenue

Store revenue increased $28.6 million, or 24.2%, to $146.5 million for the nine months ended September 30, 2025, compared to $117.9 million for the nine months ended September 30, 2024. The increase in store revenue was primarily driven by 25 Net New Store Openings subsequent to September 30, 2024, which contributed $9.8 million, as well as 10 stores opened prior to September 30, 2024, that are not yet in the comparable store base, which contributed $5.0 million. The remainder of the increase was primarily driven by Same Store Sales Growth of 10.3%, which contributed $11.3 million, which consists of 4.2%, or $4.5 million, from menu price increases and product mix, and 7.6%, or $8.3 million, from increased traffic, partially offset by a decrease of 1.4%, or $1.5 million, as a result of higher discounting for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

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Other

Other remained relatively flat and decreased $2.0 thousand, or 1.2%, to $162.0 thousand for the nine months ended September 30, 2025, compared to $164.0 thousand for the nine months ended September 30, 2024.

Beverage, food and packaging costs


	Nine Months Ended September 30,						Change
($ in thousands)	2025			2024			$		%
Beverage, food and packaging costs	$	41,641		$	33,977		$	7,664	22.6	%
As a percentage of Total revenue	28.4		%	28.8		%	n/a		(0.4)	%

Beverage, food and packaging costs increased $7.7 million, or 22.6%, to $41.6 million for the nine months ended September 30, 2025, compared to $34.0 million for the nine months ended September 30, 2024. The increase in beverage, food and packaging costs was primarily driven by 25 Net New Store Openings subsequent to September 30, 2024, which contributed approximately $2.8 million of incremental expense, as well as increased traffic at stores in the comparable store base.

As a percentage of total revenue, beverage, food and packaging costs decreased for the nine months ended September 30, 2025 primarily due to menu price increases, improvements in operating efficiencies, and volume pricing efficiencies driven by greater economies of scale as we continued to expand our store footprint.

Labor and related expenses


	Nine Months Ended September 30,						Change
($ in thousands)	2025			2024			$		%
Labor and related expenses	$	30,588		$	25,722		$	4,866	18.9	%
As a percentage of Total revenue	20.9		%	21.8		%	n/a		(0.9)	%

Labor and related expenses increased $4.9 million, or 18.9%, to $30.6 million for the nine months ended September 30, 2025, compared to $25.7 million for the nine months ended September 30, 2024. The increase in labor and related expenses was primarily driven by 25 Net New Store Openings subsequent to September 30, 2024, which contributed approximately $2.3 million in incremental expense, as well as an increase in prevailing wage rates in many of our markets and increased traffic at stores in the comparable store base.

As a percentage of total revenue, labor and related expenses decreased for the nine months ended September 30, 2025 primarily due to menu price increases to offset increases in prevailing wage rates, our ongoing efforts to improve employee retention and operational efficiency.

Occupancy and related expenses


	Nine Months Ended September 30,						Change
($ in thousands)	2025			2024			$		%
Occupancy and related expenses	$	11,641		$	9,644		$	1,997	20.7	%
As a percentage of Total revenue	7.9		%	8.2		%	n/a		(0.3)	%

Occupancy and related expenses increased $2.0 million, or 20.7%, to $11.6 million for the nine months ended September 30, 2025, compared to $9.6 million for the nine months ended September 30, 2024. The increase in occupancy and related expenses was primarily due to the 25 Net New Store Openings subsequent to September 30, 2024, which contributed approximately $1.2 million in incremental expense.

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Other store operating expenses


	Nine Months Ended September 30,						Change
($ in thousands)	2025			2024			$		%
Other store operating expenses	$	19,883		$	15,398		$	4,485	29.1	%
As a percentage of Total revenue	13.6		%	13.0		%	n/a		0.6	%

Other store operating expenses increased $4.5 million, or 29.1%, to $19.9 million for the nine months ended September 30, 2025, compared to $15.4 million for the nine months ended September 30, 2024. The increase in other store operating expenses was primarily driven by higher delivery commissions and merchant processing fees associated with increased sales and transaction volumes, which contributed approximately $2.1 million, an increase in repairs and maintenance which contributed $764.3 thousand of incremental expense as well as increased facilities costs.

Selling, general and administrative expenses


	Nine Months Ended September 30,						Change
($ in thousands)	2025			2024			$		%
Selling, general and administrative expenses	$	31,898		$	17,457		$	14,441	82.7	%
As a percentage of Total revenue	21.7		%	14.8		%	n/a		6.9	%

Selling, general and administrative expenses increased $14.4 million, or 82.7%, to $31.9 million for the nine months ended September 30, 2025, compared to $17.5 million for the nine months ended September 30, 2024. The increase in selling, general, and administrative expenses was primarily driven by $11.6 million of IPO-related expenses. The remainder of the increase was primarily driven by a $2.1 million increase in our corporate payroll expenses to support future growth and strategic initiatives, and an $867.8 thousand increase in equity-based compensation.

Depreciation and amortization


	Nine Months Ended September 30,						Change
($ in thousands)	2025			2024			$		%
Depreciation and amortization	$	8,856		$	7,334		$	1,522	20.8	%
As a percentage of Total revenue	6.0		%	6.2		%	n/a		(0.2)	%

Depreciation and amortization increased $1.5 million, or 20.8%, to $8.9 million for the nine months ended September 30, 2025, compared to $7.3 million for the nine months ended September 30, 2024. The increase in depreciation and amortization was primarily driven by 25 Net New Store Openings subsequent to September 30, 2024.

Pre-opening costs


	Nine Months Ended September 30,						Change
($ in thousands)	2025			2024			$		%
Pre-opening costs	$	3,064		$	2,428		$	636	26.2	%
As a percentage of Total revenue	2.1		%	2.1		%	n/a		—	%

Pre-opening costs increased $636.0 thousand, or 26.2%, to $3.1 million for the nine months ended September 30, 2025, compared to $2.4 million for the nine months ended September 30, 2024. The increase in pre-opening costs was primarily driven by an increase in facilities and legal costs associated with our growing development pipeline.

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Interest expense, net

Interest expense, net increased $840.0 thousand, or 10.3%, to $9.0 million for the nine months ended September 30, 2025, compared to $8.2 million for the nine months ended September 30, 2024. The increase in interest expense, net was primarily driven by higher borrowings on our Prior Credit Facility for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Other income (expense), net

The increase of $7.2 million in other expense, net to $8.0 million for the nine months ended September 30, 2025 from $717.0 thousand for the nine months ended September 30, 2024 was primarily driven by $5.3 million in expense incurred in connection with the forgiveness of our related party note receivable and a $1.6 million debt extinguishment charge incurred during the nine months ended September 30, 2025.

Income tax expense

Income tax expense was an immaterial amount for each of the nine months ended September 30, 2025 and 2024.

Non-GAAP Financial Measures

In addition to our consolidated financial statements, which are prepared in accordance with GAAP, we present Store-Level Profit, Store-Level Profit Margin, Adjusted EBITDA and Adjusted EBITDA Margin in this Form 10-Q as supplemental measures of financial performance that are not required by, or presented in accordance with, GAAP. We believe that these non-GAAP financial measures assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our operating performance. Management believes Store-Level Profit, Store-Level Profit Margin, Adjusted EBITDA and Adjusted EBITDA Margin are useful to investors in highlighting trends in our operating performance, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate and capital investments. Management uses Store-Level Profit, Store-Level Profit Margin, Adjusted EBITDA and Adjusted EBITDA Margin to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions and to compare our performance against that of other peer companies using similar measures. Management supplements GAAP results with non-GAAP financial measures to provide a more complete understanding of the factors and trends affecting our business than GAAP results alone provide.

Store-Level Profit, Store-Level Profit Margin, Adjusted EBITDA and Adjusted EBITDA Margin are not recognized terms under GAAP and should not be considered as alternatives to total revenue, net income (loss) and net income (loss) margin as measures of financial performance, or cash provided by operating activities as measures of liquidity, or any other performance measure derived in accordance with GAAP. Additionally, these measures are not intended to be measures of free cash flow available for management’s discretionary use, as they do not consider certain cash requirements such as interest payments, tax payments, and debt service requirements. Because not all companies use identical calculations, the presentation of these measures may not be comparable to other similarly titled measures of other companies and can differ significantly from company to company.

Our Store-Level Profit, Store-Level Profit Margin, Adjusted EBITDA and Adjusted EBITDA Margin measures have limitations as analytical tools, and you should not consider them in isolation, or as substitutes for analysis of our results as reported under GAAP. Some of these limitations are:

•Store-Level Profit and Adjusted EBITDA do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;

•Store-Level Profit and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;

•Store-Level Profit and Adjusted EBITDA do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debts;

•Store-Level Profit and Adjusted EBITDA do not reflect period to period changes in taxes, income tax expense or the cash necessary to pay income taxes;

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•Store-Level Profit and Adjusted EBITDA do not reflect the impact of earnings or cash charges resulting from matters we consider not to be indicative of our ongoing operations;

•Store-Level Profit is not indicative of our overall results and does not accrue directly to the benefit of shareholders, as corporate-level expenses are excluded;

•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements; and

•other companies in our industry may calculate Store-Level Profit, Store-Level Profit Margin, Adjusted EBITDA and Adjusted EBITDA Margin differently than we do, limiting their usefulness as comparative measures.

Because of these limitations, Store-Level Profit, Store-Level Profit Margin, Adjusted EBITDA and Adjusted EBITDA Margin should not be considered as measures of discretionary cash available to invest in business growth or to reduce indebtedness.

The following tables provide reconciliations of net loss to Adjusted EBITDA and net loss margin to Adjusted EBITDA Margin as well as income from operations to Store-Level Profit and Store-Level Profit Margin for the periods presented:


	Three Months Ended September 30,
($ in thousands)	2025			2024
Net loss	$	(16,175)		$	(722)
Non-GAAP Adjustments:
Interest expense, net	2,871			3,073
Income tax expense	31			71
Depreciation and amortization	3,030			2,533
Transaction costs(1)	9,056			875
Capital restructuring costs(2)	6,866			714
Equity-based compensation	868			—
Legal settlement, net(3)	273			(1,486)
Other costs(4)	102			64
Adjusted EBITDA	$	6,922		$	5,122
Net loss margin	(31.4)		%	(1.7)		%
Adjusted EBITDA Margin	13.4		%	12.4		%

(1)Includes non-recurring professional service fees and executive compensation related to our IPO.

(2)For the three months ended September 30, 2025, includes the forgiveness of our related party note receivable (refer to Note 14 in the unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q) along with a debt extinguishment charge related to the payoff of our Prior Credit Facility.

(3)For the three months ended September 30, 2025, includes non-recurring legal fees. For the three months ended September 30, 2024, includes legal costs, offset by insurance proceeds, stemming from the Roasters settlement (refer to Note 5 in the audited consolidated financial statements included in our Prospectus), along with other non-recurring legal fees.

(4)Non-recurring professional service and legal costs.

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	Nine Months Ended September 30,
($ in thousands)	2025			2024
Net loss	$	(18,120)		$	(2,957)
Non-GAAP Adjustments:
Interest expense, net	9,028			8,188
Income tax expense	253			197
Depreciation and amortization	8,856			7,334
Transaction costs(1)	11,641			2,609
Capital restructuring costs(2)	7,937			1,057
Equity-based compensation	868			—
Legal settlement, net(3)	235			(1,340)
Point-of-sale system transition costs	—			579
Other costs(4)	287			253
Adjusted EBITDA	$	20,985		$	15,920
Net loss margin	(12.4)		%	(2.5)		%
Adjusted EBITDA Margin	14.3		%	13.5		%

(1)Includes non-recurring professional service fees and executive compensation related to our IPO.

(2)For the nine months ended September 30, 2025, includes the forgiveness of our related party note receivable (refer to Note 14 in the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Form 10-Q), a debt extinguishment charge related to the payoff of our Prior Credit Facility and fees incurred related to the Series A Redemption Agreement.

(3)For the nine months ended September 30, 2025, includes non-recurring legal costs, offset by insurance proceeds. For the nine months ended September 30, 2024, includes legal costs, offset by insurance proceeds, stemming from the Roasters settlement refer to Note 5 in the audited consolidated financial statements included in our Prospectus), along with other non-recurring legal fees.

(4)Non-recurring professional service and legal costs.


	Three Months Ended September 30,
($ in thousands)	2025			2024
Income (loss) from operations	$	(6,407)		$	3,138
Other	(58)			(56)
Selling, general and administrative expenses	17,158			4,894
Depreciation and amortization	3,030			2,533
Pre-opening costs	1,503			1,144
Store-Level Profit	$	15,226		$	11,653
Income (loss) from operations margin	(12.4)		%	7.6		%
Store-Level Profit Margin	29.6		%	28.1		%


	Nine Months Ended September 30,
($ in thousands)	2025			2024
Income (loss) from operations	$	(889)		$	6,145
Other	(162)			(164)
Selling, general and administrative expenses	31,898			17,457
Depreciation and amortization	8,856			7,334
Pre-opening costs	3,064			2,428
Store-Level Profit	$	42,767		$	33,200
Income (loss) from operations margin	(0.6)		%	5.2		%
Store-Level Profit Margin	29.2		%	28.1		%

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Liquidity and Capital Resources

IPO and Related Transactions

On September 15, 2025, in connection with the close of our IPO, we issued and sold 16,911,764 shares of our Class A common stock at a price to the public of $20.00 per share, resulting in gross proceeds to us of approximately $338.2 million and net proceeds to us of approximately $314.6 million, after deducting the underwriting discount of approximately $23.7 million. We used net proceeds from the IPO to: (i) purchase 3,857,642 newly issued LLC Units for approximately $71.8 million directly from Black Rock OpCo at a price per unit equal to the IPO price of Class A common stock less the underwriting discount; and (ii) purchase 13,054,122 LLC Units from certain Continuing Equity Owners for approximately $242.8 million at a price per unit equal to the IPO price per share of Class A common stock less the underwriting discount. Concurrently with the IPO, an affiliate of our Co-Founders purchased 3,118,938 newly issued LLC Units from Black Rock OpCo for approximately $62.4 million at a price per unit equal to $20.00 per share (the “IPO Price”). Following the IPO and related Transactions, we own a 65.0% interest in Black Rock OpCo.

In connection with our IPO, we undertook certain organizational transactions as described in the prelude to this Form 10-Q under “The Transactions”. Following the Transactions, we are a holding company and our sole material asset is our equity interest in Black Rock OpCo, which, through its direct and indirect subsidiaries, conducts all of our operations. Because Black Rock Coffee Bar, Inc. is the sole managing member of Black Rock OpCo, we indirectly operate and control all of the business and affairs (and consolidate the financial results) of Black Rock OpCo and its subsidiaries. In addition, we completed a series of reorganization transactions, including: (i) the seventh amendment and restatement of the Black Rock OpCo LLC Agreement to, among other things, effect a recapitalization in which all existing ownership interests in Black Rock OpCo are converted into one class of LLC Units; (ii) the amendment and restatement of the Black Rock Coffee Bar, Inc. certificate of formation to, among other things, authorize three classes of common stock; (iii) Black Rock Coffee Bar, Inc.’s acquisition of common units held by the Blocker Companies; and (iv) Black Rock Coffee Bar, Inc.’s designation as managing member of Black Rock OpCo.

Concurrently with the closing of the IPO, Black Rock OpCo entered into the New Credit Agreement with JPMorgan Chase Bank, N.A., as the administrative agent, and other loan parties and lenders party thereto to provide for (i) a $50.0 million New Term Loan and (ii) a $25.0 million New Revolving Credit Facility. As of the closing of the IPO, the aggregate principal amount borrowed under the New Credit Facilities was $50.0 million from the New Term Loan. Subsequent to the IPO, we made a principal payment in the amount of $30.0 million, thereby reducing the outstanding balance of the New Term Loan as of September 30, 2025 to $20.0 million.

Immediately following the consummation of the IPO, an affiliate of our Co-Founders purchased 3,118,938 newly issued LLC Units from Black Rock OpCo (and corresponding shares of our Class C common stock) for approximately $62.4 million at the IPO price.

Black Rock OpCo used or intends to use the net proceeds from the sale of its LLC Units in connection with the IPO, together with proceeds from the Refinancing and Co-Founder Contribution to: (i) repay approximately $113.2 million of borrowings outstanding under our Prior Credit Facility, (ii) to pay $8.0 million of non-underwriting offering expenses, and (iii) use the remainder for general corporate purposes.

Overview

We assess our liquidity in terms of our ability to generate adequate amounts of cash to meet current and future needs. Our primary requirements for liquidity are to fund our working capital needs, operating lease obligations, capital expenditures and general corporate needs. Our requirements for working capital are generally not significant because our guests pay for their beverage and food purchases in cash or on debit or credit cards at the time of the sale and we are able to sell many of our inventory items before payments are due to the supplier of such items. Our ongoing capital expenditures are principally related to opening new stores, existing store capital investments for maintenance, as well as investments in our corporate technology infrastructure to support our corporate office, store locations and digital strategy. We have historically funded our operations primarily through cash provided by operating activities, draws under our Prior Credit Facility as well as the issuance and sales of securities through private placements. Although we have no specific current plans to do so, if we decide to pursue one or more significant acquisitions, we may incur additional debt or sell additional equity securities to finance such acquisitions, which would result in additional expenses or dilution to our shareholders.

Black Rock Coffee Bar, Inc. is a holding company and has no material assets other than its ownership of LLC Units (which may be held indirectly through certain of our wholly-owned corporate subsidiaries). Black Rock Coffee Bar, Inc. has no independent means of generating revenue. The Black Rock OpCo LLC Agreement

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provides for the payment of certain distributions to the TRA Parties and to Black Rock Coffee Bar, Inc. in amounts sufficient to cover the income taxes imposed on such members with respect to the allocation of taxable income from Black Rock OpCo as well as to cover Black Rock Coffee Bar, Inc.’s obligations under the Tax Receivable Agreement and other administrative expenses.

The terms of our New Credit Facilities contain covenants that may restrict Black Rock OpCo from paying distributions from Black Rock OpCo to Black Rock Coffee Bar, Inc., subject to certain exceptions. Further, Black Rock OpCo is generally prohibited under Delaware law from making a distribution to a member to the extent that, at the time of the distribution, after giving effect to the distribution, Black Rock OpCo’s liabilities (with certain exceptions), as applicable, exceed the fair value of Black Rock OpCo’s assets.

We are obligated to make payments under the Tax Receivable Agreement. The actual timing and amount of any payments that may be made under the Tax Receivable Agreement will vary depending upon a number of factors, including the timing of redemptions or exchanges by the TRA Parties, the amount of gain recognized by the TRA Parties, the amount and timing of the taxable income we generate in the future, and the federal tax rates then applicable. However, we expect that the payments that we are required to make to the TRA Parties will be substantial. Any payments made by us to the TRA Parties under the Tax Receivable Agreement will generally reduce the amount of overall cash flow that might have otherwise been available to use and, to the extent that we are unable to make payments under the Tax Receivable Agreement for any reason, the unpaid amounts generally will be deferred and will accrue interest until paid by us.

If we do not have sufficient funds to pay taxes, payments under the Tax Receivable Agreement or other liabilities or to fund our operations, we may have to borrow funds, which could materially adversely affect our liquidity and financial condition and subject us to various restrictions imposed by any such lenders. To the extent we are unable to make payments under the Tax Receivable Agreement for any reason, such payments generally will be deferred and will accrue interest until paid; provided, however, that nonpayment for a specified period may constitute a material breach of a material obligation under the Tax Receivable Agreement and therefore accelerate payments due under the Tax Receivable Agreement. In addition, if Black Rock OpCo does not have sufficient funds to make distributions, the ability of Black Rock Coffee Bar, Inc. to declare and pay cash dividends will also be restricted or impaired.

In addition, we may require additional capital resources to execute strategic initiatives to grow our business in the future. We believe, however, that cash provided by operating activities and existing cash on hand, together with remaining amounts available under our New Credit Facilities, will be sufficient to satisfy our anticipated cash requirements for the next twelve months and the foreseeable future, including our expected capital expenditures for expansion of our store base and production facilities, incremental public company costs, debt service requirements, Tax Receivable Agreement obligations, operating lease obligations, and working capital obligations. See Note 6 and Note 7 to our consolidated financial statements included elsewhere in this Form 10-Q for more information. Our sources of liquidity could be affected by factors described in Part II, Item 1A “Risk Factors” and, depending on the severity and direct impact of these factors on us, we may not be able to secure additional financing on acceptable terms, or at all.

Cash Overview

We had cash and cash equivalents of $32.6 million and $10.2 million as of September 30, 2025 and December 31, 2024, respectively.

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Cash Flows

The following table summarizes our cash flows for the periods presented:


	Nine Months Ended September 30,				Change
Summary of Cash Flows	2025		2024		$		%
($ in thousands)
Net cash (used in) provided by operating activities	$	(2,914)	$	9,147	$	(12,061)	(131.9)	%
Net cash used in investing activities	(23,184)		(18,644)		(4,540)		24.4	%
Net cash provided by financing activities	48,517		5,160		43,357		840.3	%
Net increase (decrease) in cash and cash equivalents	$	22,419	$	(4,337)	$	26,756	(616.9)	%

Operating Activities:

The decrease in net cash provided by (used in) operating activities for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, was primarily driven by $17.4 million of IPO-related expenses paid during the nine months ended September 30, 2025, partially offset by an increase in revenue due to 25 Net New Store Openings subsequent to September 30, 2024, incremental revenue generated from 10 stores opened prior to September 30, 2024 that are not yet in the comparable store base and Same Store Sales Growth of 10.3%, as well as improved operating performance as a result of improved labor efficiency and working capital management.

Investing Activities:

The increase in net cash used in investing activities for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, was primarily driven by increased investments in capital expenditures as a result of Net New Store Openings and our growing development pipeline.

Financing Activities:

The increase in net cash provided by financing activities for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, was primarily driven by net proceeds received from our IPO, new borrowings under the New Credit Facilities and the Co-Founder Contributions, partially offset by purchasing LLC Units from the Continuing Equity Owners, repaying all outstanding borrowings under the Prior Credit Facility and the $30.0 million principal payment on the New Credit Facilities.

Material Cash Requirements

Material cash requirements from known contractual obligations arising in the normal course of business primarily consist of operating lease obligations and long-term debt. In addition, we expect that we will require significant cash to make payments under the Tax Receivable Agreement, and we are currently unable to estimate the amounts and timing of the payments that may be due thereunder. The following table summarizes our current and long-term material cash requirements as of September 30, 2025:


	Payments Due by Period
($ in thousands)	Total		Remainder of 2025		2026-2027		2028-2029		2030 and thereafter
Operating leases	$	201,593	$	5,246	$	33,275	$	34,465	$	128,607
Long-term debt(1)	24,936		650		6,520		8,636		9,130
Total	$	226,529	$	5,896	$	39,795	$	43,101	$	137,737

(1)Long-term debt includes the principal amount of borrowings outstanding under our New Credit Facilities and the interest payments on our New Credit Facilities, which are based on the weighted-average interest rate as of September 30, 2025. As contractual interest rates and the amount of debt outstanding are variable in certain cases, actual cash payments may differ from the estimates provided.

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Prior Credit Facility

On May 31, 2024, we entered into the Prior Credit Facility with RCS SBIC Fund II, L.P. and TCW Asset Management Company, LLC consisting of a $112.5 million term loan and a $25.0 million delayed draw term loan and an option allowing the Company to increase the size of the credit facility by $20.0 million through incremental delayed draw term loans. As of December 31, 2024, we had $92.6 million in aggregate outstanding principal balance under the Prior Credit Facility. In April 2025, we amended the Prior Credit Facility through the Fifth Amendment to the Prior Credit Facility (the “Fifth Amendment”) which increased the delayed draw term loan commitment by $10.0 million and extended the delayed draw availability period from September 30, 2025 to March 31, 2026. An additional $6.0 million was drawn from the delayed draw term loan in May 2025, followed by a subsequent draw of $5.0 million in August 2025. Concurrently with the consummation of the IPO, we repaid all outstanding borrowings under the Prior Credit Facility.

New Credit Facilities

Concurrently with the consummation of the IPO, Black Rock OpCo and certain of its wholly-owned subsidiaries entered into the New Credit Agreement with JPMorgan Chase Bank, N.A., as the administrative agent, and other loan parties and lenders party thereto, to provide for (i) a $50.0 million New Term Loan and (ii) a $25.0 million New Revolving Credit Facility. As of the closing of the IPO, the aggregate principal amount borrowed under the New Credit Facilities was $50.0 million from the New Term Loan which was used, together with proceeds from the Co-Founder Contribution and net proceeds from the IPO, to repay all amounts outstanding under the Prior Credit Facility. Subsequent to the IPO, we made a principal payment in the amount of $30.0 million thereby reducing the outstanding balance of the New Term Loan as of September 30, 2025 to $20.0 million.

Pursuant to the New Credit Agreement, certain subsidiaries of Black Rock OpCo are guarantors of the obligations under the New Credit Agreement. Simultaneously with the execution of the New Credit Agreement, Black Rock OpCo and its subsidiaries entered into a pledge and security agreement. Pursuant to the pledge and security agreement, the New Credit Facilities are secured by liens on substantially all of our assets, including the intellectual property of Black Rock OpCo and its subsidiaries and the equity interests of Black Rock OpCo's various subsidiaries.

Borrowings under the New Credit Agreement are available as alternate base rate (“ABR”) or term benchmark loans. ABR loans under the New Credit Agreement accrue interest at an alternate base rate plus an applicable rate, and term benchmark loans accrue interest at an adjusted SOFR rate plus an applicable rate. The ABR rate represents the greatest of (i) the prime rate, (ii) the Federal Reserve’s Bank of New York overnight rate plus 0.5% and (iii) the one-month adjusted term SOFR rate plus 1.0%. The applicable rate for the ABR and term benchmark loans is tied to a pricing grid tied to our net rent adjusted leverage ratio. The adjusted SOFR rate will represent the term SOFR rate plus 0.10%. The applicable rate spread for ABR and term benchmark loans ranges from 0.50% to 1.75% and 1.50% to 2.75%, respectively. Interest on the new Credit Agreement is payable at least quarterly and upon maturity. As of September 30, 2025, the weighted-average interest rate on outstanding borrowings under the New Revolving Credit Facility was 6.75%.

The New Revolving Credit Facility also has a variable commitment fee, which is payable quarterly based on our net rent adjusted leverage ratio. We expect the commitment fee to range from 0.25% to 0.35% per annum. We are obligated to pay a fixed fronting fee for letters of credit of 0.125% per annum.

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Seasonality

Our business is subject to seasonal fluctuations in that our sales are typically nominally higher during the spring and fall months affecting the second and third quarters.

Off Balance Sheet Arrangements

As of September 30, 2025, we did not have any off-balance sheet arrangements, except for operating leases entered in the normal course of business where we have not taken physical possession of the leased property.

Critical Accounting Policies and Use of Estimates

Our critical accounting policies related to income taxes, Tax Receivable Agreement and equity-based compensation are as follows:

Leases

We lease stores, warehouse facilities and corporate offices under various lease agreements. At inception of a lease, we determine its classification as an operating or finance lease. All of our leases are classified as operating leases. Determining the probable term for each lease requires judgment by management and can impact the classification and accounting for a lease as financing or operating, as well as the period for straight-lined rent expense and depreciation period for leasehold improvements. To determine the length of the lease term at inception, we consider both termination and renewal option periods available. Reasonably certain renewal periods are included in the lease term at commencement.

We calculate operating lease right-of-use assets and lease liabilities at the present value of fixed lease payments over the reasonably certain lease term beginning at the commencement date. We use an incremental borrowing rate (“IBR”) in determining the present value of future lease payments as there are no explicit rates provides in the leases. The IBR is an estimate based on several factors, including financial market conditions, comparable company and credit analysis as well as management judgment. If the IBR was changed, our operating lease right-of-use assets and lease liabilities could differ materially. See Note 8 to our consolidated financial statements included in our Prospectus.

Income Taxes

In determining the provision for income taxes, we make estimates and judgments which affect our evaluation of the carrying value of our deferred tax assets as well as our calculation of certain tax liabilities. Our expense/(benefit) for income taxes and deferred tax assets and liabilities requires the use of estimates based on our management's interpretation and application of complex tax laws and accounting guidance.

Deferred taxes are recorded using the asset and liability method, whereby tax assets and liabilities are determined based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. We regularly evaluate valuation allowances established for deferred tax assets for which future realization is uncertain. In assessing the realizability of deferred tax assets, we consider both positive and negative evidence, including scheduled reversals of deferred tax assets and liabilities, projected future taxable income, tax planning strategies and results of recent operations. If, based on the weight of available evidence, it is more-likely-than-not that the deferred tax assets will not be realized, a valuation allowance is recorded. See Note 11 to the unaudited condensed consolidated financial statements elsewhere in this Form 10-Q for further details. Estimating future taxable income is inherently uncertain and requires judgment.

Tax Receivable Agreement

In connection with our IPO, we entered into a TRA with the TRA Parties. The TRA generally provides for us to pay the TRA Parties 85% of the net cash savings, if any, in U.S. federal, state and local income tax that we actually realize or are deemed to realize in certain circumstances. We will retain the benefit of the remaining 15% of these net cash savings. As of September 30, 2025, we recognized $40.6 million of liabilities related to our obligations under the TRA.

Changes in the projected TRA liability may occur based on changes in anticipated future taxable income, changes in applicable tax rates or other changes in tax attributes that may occur and impact the expected future tax benefits to be received by the Company. Estimating future taxable income is a key input in calculating the

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TRA liability, and is inherently uncertain and required judgment. In projecting future taxable income, we consider our historical results and incorporate certain assumptions. See Note 11 to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q for further details.

Equity-Based Compensation

We have issued stock options and RSUs. Equity-based compensation expense is measured based on the grant date fair value of those awards and is recognized on a straight-line basis over the requisite service period. Equity-based compensation expense is based on awards outstanding, and forfeitures are recognized as they occur. Equity-based compensation expense is included in selling, general and administrative expenses in the consolidated statements of operations.

We use the Black-Scholes option-pricing model to estimate the fair value of stock options at the grant date. The use of the Black-Scholes option-pricing model requires the use of highly subjective assumptions, including the expected term, risk-free interest rate, expected volatility, and expected dividend yield of the underlying common stock. The fair value of RSUs is equal to the fair value of our common stock at the date of grant.

JOBS Act Election

We are currently an “emerging growth company,” as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

We will remain an emerging growth company until the earliest of (i) December 31, 2030, (ii) the last day of the first fiscal year in which our annual gross revenue exceeds $1.235 billion, (iii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (iv) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Commodity Risks

Our business is dependent on, among other things, our ability to anticipate and react to changes in the costs of key operating resources, including beverage commodities, energy and other commodities. In many cases, we believe we will be able to address material commodity cost increases through purchasing contracts, pricing arrangements, adjusting our menu pricing, or other operational adjustments that increase productivity. However, we cannot assure you that these measures will be able to fully offset tariffs, sustained inflation of, or substantial increases in costs and expenses, including coffee, dairy, fuel, sugar, cocoa and packaging commodities pricing, which could increase store operating costs as a percentage of store sales and impact our results of operations.

Labor Costs

We have experienced minimum wage increases, which directly affect our labor costs, and other upward pressure on wage rates in several states where we have stores. While we generally seek to offset any wage increases with operational efficiencies and by leveraging Same Store Sales Growth, such measures may not fully offset any wage increases and we may seek to increase our menu prices. We cannot assure you that we will be able to fully offset wage increases through these measures.

Interest Rate Risk

We have historically been exposed to interest rate risk through fluctuations in interest rates on our debt obligations. Our New Credit Facilities carry interest at a floating rate. We seek to manage exposure to adverse interest rate changes through our normal operating and financing activities. As of September 30, 2025, we had $20.0 million in aggregate outstanding principal balance under the New Credit Facilities and a hypothetical 1.0%

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increase of interest rates would result in an increase in our annual interest expense of approximately $200.0 thousand.

Impact of Inflation

The primary inflation factors affecting our operations are commodity and supply costs, labor costs, and construction costs of stores. Increases in minimum wage requirements directly affect our labor costs. Our leases require us to pay taxes, maintenance, repairs, insurance and utilities, all of which are generally subject to inflationary increases. Finally, the total cost to build our stores is impacted by inflation. Specifically, increases in sitework and permitting, construction materials, labor, and equipment costs may increase our overall development costs and capital expenditures, and potentially result in higher rent expenses for new stores. We continue to encounter current commodity inflation, known or pending legislation that will increase minimum wages in certain states, and labor market forces that at times may cause us to increase wages in order to adequately staff our stores. We expect these factors to affect our operating results in the foreseeable future. While these cost increases have impacted our operating results, we have taken measures to gradually increase our menu prices and make operating adjustments that increase productivity to help offset these pressures. Price increases and other inflationary pressures may lead to decreases in consumer demand.

Item 4. Controls and Procedures

Limitations on effectiveness of controls and procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation and as a result of the material weaknesses described below, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2025, our disclosure controls and procedures were not effective at a reasonable assurance level.

In connection with the audit of our consolidated financial statements for the years ended December 31, 2024 and 2023, our management determined that material weaknesses existed in our internal control over financial reporting due to (i) a lack of segregation of duties surrounding journal entries without sufficient compensating controls to ensure journal entries are appropriately reviewed and approved by an independent user other than the preparer with an appropriate level of supervision, and (ii) ineffective controls over the identification and accurate initial recognition of leases. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis. Management is taking action to remediate the material weaknesses, which includes (i) designing and implementing additional or enhanced controls to address the access that could enable the creation of journal entries without review and approval, formalizing compensating controls and system controls that enable proper segregation of duties related to journal entry data and processes, and (ii) enhancing controls and processes to identify leases and accurately record their initial recognition. While we continue to take remediation steps, we have not concluded that the material weaknesses have been remediated as of September 30, 2025.

Changes in Internal Control over Financial Reporting

Other than in connection with our efforts to remediate our material weaknesses described above, there have been no changes during the three months ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II - Other Information

Item 1. Legal Proceedings

The information required with respect to this Part II, Item 1 can be found under Note 15 (Commitments and Contingencies), to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Item 1A. Risk Factors

Investing in our Class A common stock involves a high degree of risk because our business is subject to numerous risks and uncertainties, as further described below as well as the other information in this Form 10-Q, including the “Forward-Looking Statements” safe harbor and our condensed consolidated financial statements and related notes appearing elsewhere in this Form 10-Q, before making an investment decision. The risks described below could have a material adverse impact on our financial position, results of operations or cash flows. Although it is not possible to predict or identify all such risks and uncertainties, they may include, but are not limited to, the factors discussed below. The risks described herein are not the only risks we may face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our financial condition, results of operations or cash flows. In such an event, the market price of our Class A common stock could decline and you may lose all or part of your investment.

Risks Related to Our Business and Industry

We have a history of losses and, especially if we continue to grow at an accelerated rate, we may not achieve or maintain profitability in the future.

We have incurred net losses each year since our inception, including net losses of $7.2 million and $8.7 million for the years ended December 31, 2024 and 2023, respectively. For the nine months ended September 30, 2025 and September 30, 2024, we incurred net losses of $18.1 million and $3.0 million, respectively. We anticipate that our operating expenses will increase substantially in the foreseeable future, in particular, as we continue to open new stores, expand marketing channels and operations, hire additional team members and increase other general and administrative costs. Furthermore, as a newly public company, we have incurred and expect to continue to incur additional legal, accounting, and other expenses that we did not incur as a private company. As a result, our net losses may continue and we may not achieve profitability for the foreseeable future.

In addition, the capital expenditure requirements to open a new store have increased and may continue to increase. Further, we currently expect that all of our new store openings in 2025 and beyond will have drive-thru pick-up capabilities, which require significant additional capital expenditures as stores with drive-thru pick-up capabilities are typically larger, resulting in higher real estate costs as well as incremental infrastructure and construction costs.

These efforts and additional expenses may prove more expensive than we expect, and we cannot guarantee that we will be able to increase our revenue to offset such expenses. Our revenue growth may slow or our revenue may decline for a number of other reasons, including reduced demand for our products, increased competition, or if we cannot capitalize on growth opportunities. If our revenue does not grow at a greater rate than our operating expenses, we will not be able to achieve profitability.

Food safety and quality concerns may negatively impact our brand, business and results of operations.

Incidents or reports, whether true or not, of food-borne or water-borne illness or other food safety issues, food contamination or tampering, employee hygiene and cleanliness failures, allergen cross-contamination or improper employee conduct at our stores could lead to product liability or other claims. Such incidents or reports could negatively affect our brand and reputation as well as our business, revenue and results of operations. Similar incidents or reports occurring at coffee and convenience stores unrelated to us could likewise create negative publicity, which could negatively impact consumer behavior towards us. If any guest becomes, or is under the belief that they have become, ill due to a food safety issue, we may temporarily close some stores, which would adversely impact our results of operations. Furthermore, while we require our third-party suppliers and distributors to comply with our food safety standards, we do not have control over their manufacturing and packaging processes. In addition, we also do not have control over handling procedures once our products

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have been shipped for distribution. We may need to recall or withdraw some or all of our products if they become damaged, contaminated, adulterated, or misbranded, whether caused by us or someone in our manufacturing or supply chain. Our products may also be subject to food recalls or other regulatory warnings promulgated by the U.S. Food and Drug Administration (the “FDA”) or other regulatory bodies. A recall or withdrawal could result in destruction of ingredients and inventory, negative publicity, temporary facility closings for us or our third-party suppliers and distributors, supply chain interruption, substantial costs of compliance or remediation, fines, and increased scrutiny by federal, state, and foreign regulatory agencies.

Food safety issues may be caused by a variety of factors, many of which are out of our control. For example, these incidents may occur when guests or other individuals, including employees, enter our store while ill and contaminate ingredients, surfaces, or other individuals. We cannot guarantee that food and beverage items will be properly maintained throughout the supply and delivery chain. Any food safety issue arising from a distributor or supplier will likely affect multiple locations rather than a single store. The risk of food safety issues is also increased with respect to orders delivered through third-party delivery service providers, as we often have limited or no control over how the food or beverages are delivered. In addition, our stores and roasteries are subject to review and examination by local, state and federal authorities, which may result in temporary or permanent closures. Such closures may negatively impact results and damage our brand.

We cannot guarantee that our internal controls and training will be fully effective in preventing all food-borne illnesses. Our future initiatives may require new or increased food safety measures, which we may not be successful in implementing. New illnesses resistant to our, or our third-party suppliers or distributors’, current precautions may develop in the future, or diseases with long incubation periods could arise, that could give rise to claims or allegations on a retroactive basis. One or more instances of food-borne illness in one of our stores could negatively affect sales at all our stores if highly publicized. This risk exists even if it were later determined that the illness was wrongly attributed to one of our stores. Additionally, even if food-borne illnesses were not identified at our stores, our revenue could be adversely affected if instances of food-borne illnesses at other coffee and beverage chains were highly publicized.

Evolving consumer preferences and tastes, including public or medical opinions about caffeine and sugar consumption, or changes in consumer spending may adversely affect our business.

Our continued success depends on our ability to attract and retain guests. Our financial results could be adversely affected by a shift in consumer spending away from our products, changes in attitudes regarding diet and health (including use of weight-loss or appetite-suppressing drugs), decreases in general discretionary consumer spending (including due to lack of or decreasing consumer confidence or inflation), lack of guest acceptance of new products (including due to price increases necessary to cover the costs of new products or higher input costs) or platforms (including changes to our mobile application or loyalty rewards programs or other marketing initiatives), decline in our brand perception or competitiveness in the marketplace (including due to the emergence of new competitors or expansion of our existing competitors), a reduction in individual vehicle ownership, which in turn may reduce the usefulness and convenience of our stores, or a reduction in guest demand for our current offerings as new products are introduced. We may not be successful in introducing new products to our menu or new features to our mobile application, including in connection with the ongoing implementation of our loyalty program, which was introduced in June 2024.

In addition, most of our beverages contain sugar, caffeine, dairy products, and other compounds, such as artificial coloring, the health effects of which are the subject of public and regulatory scrutiny, including the suggestion of linkages to a variety of adverse health effects. There is increasing consumer awareness of health risks that are attributed to ingredients we use, including obesity, increased blood pressure and heart rate, anxiety and insomnia, as well as increased consumer litigation based on alleged adverse health impacts of consumption of various food and beverage products, including those associated with caffeine and sugar. While we offer alternatives, including caffeine-free beverages and reduced sugar and sugar-free items, negative publicity, or an unfavorable report on the health effects of sugar, caffeine or other ingredients in our products or changes in public perception of these ingredients could significantly reduce the demand for our products.

In addition, social media has contributed to an increase in “secret menu” style drinks that are not created or marketed by us. Such drinks can be ordered by guests, for example, by asking for specific combinations of flavors or ingredients. We have no control over such trends and may not become timely aware of them. Such trends may also result in the mixture of ingredients in ways that could be perceived negatively, including with regard to health effects, and such perception could harm our business.

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Further, an unfavorable report on the health effects of caffeine, other ingredients in energy drinks or energy drinks generally, or criticism or negative publicity regarding the caffeine content and/or any other ingredients in our Fuel energy drink or energy drinks generally, including product safety concerns, could have an adverse effect on our business, reputation, financial condition and results of operations. Articles critical of the caffeine content and/or other ingredients in energy drinks and/or articles indicating certain health risks of energy drinks have been published in recent years. We believe the overall growth of the energy drink market in the United States may have been negatively impacted by the ongoing negative publicity and comments that continue to appear in the media questioning the safety of energy drinks, and suggesting limitations on their ingredients (including caffeine), and/or the levels thereof, and/or imposing minimum age restrictions for consumers. If reports, studies or articles critical of caffeine and/or energy drinks continue to be published or are published in the future, or additional voluntary measures are taken, they could adversely affect the demand for our products. If we are unable to satisfy all criteria set forth in any model energy drink guidelines, including, without limitation, those adopted by the American Beverage Association, and/or any international beverage associations, it could negatively affect our overall reputation, which in turn could have a negative impact on our business, financial condition and results of operations.

A decrease in guest traffic as a result of these health concerns or negative publicity could significantly reduce the demand for our products and could harm our business.

We may not be able to compete successfully with other coffee stores, quick service restaurants and convenience stores, including the growing number of coffee delivery options.

The food service and restaurant industry, including the specialty coffee market, is intensely competitive. We expect competition in this market to continue to be fierce as we compete on a variety of fronts, including convenience, taste preferences, price, quality, service, location brand reputation, digital engagement, loyalty incentives, quality of user experience on and consistent performance of our website and mobile application, and the ambience and condition of each store. Our stores compete with national, regional and local coffee chains, quick service restaurants (“QSRs”), and convenience stores for guests, store locations and qualified management and other staff. If our stores cannot compete successfully with other beverage and coffee stores, including Starbucks and Dutch Bros, other specialty coffee stores, drive-thru QSRs and the growing number of coffee delivery options in new and existing markets, we could lose guests and our brand perception and revenue could decline.

Compared to us, some of our competitors have substantially greater financial and other resources, have been in business longer, have greater brand recognition or are better established in the markets where our stores are located or are planned to be located. In some markets that we may enter, there are already well-funded competitors in the coffee or beverage business that may challenge our ability to grow into those regions. Furthermore, certain markets where we compete or may compete in the future may limit the number of drive-thru businesses operating within their geographic region, which could negatively affect our ability to grow into those markets. Some of our competitors also have substantially greater financial and other resources to devote to innovation in products, technology, and market and consumer data analytics, including integration, use, or offering of new technologies, including artificial intelligence (“AI”). We may be unable to offer new or innovative products and technologies to our guests that are offered by our competitors, or there may be a delay in our ability to innovate or implement new technologies. Any of these competitive factors may impair our ability to compete effectively in the marketplace and harm our business, financial condition and results of operations.

Additionally, if our competitors begin to evolve their business strategies and adopt aspects of our business model, such as our modern and welcoming in-store experience, drive-thru convenience, digital ordering, loyalty program and similar product offerings or branding, our guests may be drawn to those competitors for their beverage needs and our business and the distinctiveness of our brand could be harmed.

Our growth strategy depends in part on opening new stores in existing and new markets. We may be unsuccessful in opening new stores or establishing new markets, which could adversely affect our growth.

As of September 30, 2025, we had 169 stores across seven states. One of the key means to executing on our growth strategy will be through opening new stores and operating those stores on a profitable basis. For example, we opened 24 new stores in 2024 and twenty new stores in the first nine months of 2025. Our ability to open new stores is dependent upon a number of factors, many of which are beyond our control, including our ability to:

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•identify available and suitable sites, specifically for drive-thru locations;

•compete for such sites;

•reach acceptable agreements regarding the lease of locations;

•obtain or have available the financing required to acquire and operate a store, including construction and opening costs, which includes access to build-to-suit leases and ground lease construction arrangements;

•respond to unforeseen engineering or environmental problems with leased premises;

•avoid the impact of inclement weather, natural disasters and other calamities;

•hire, train and retain the skilled management and other employees necessary to meet staffing needs;

•ensure that the guest experience, ambience and condition of each new location is cohesive with and of substantially the same quality as our existing locations;

•obtain, in a timely manner and for an acceptable cost, required licenses, permits and regulatory approvals and respond effectively to any changes in local, state or federal law and regulations, such as regulatory bans on new drive-through businesses, that adversely affect our costs or ability to open new stores; and

•control construction and equipment cost increases for new stores and secure the services of qualified contractors and subcontractors in an increasingly competitive environment.

As we look to expand geographically into new markets in which we have little or no prior operating experience, our exposure to the above factors may be further amplified as we have less familiarity with such new markets, including any regulatory restrictions or store-opening processes. There is no guarantee that a sufficient number of suitable sites for stores will be available in desirable areas or on terms that are acceptable to us in order to achieve our growth plan. Therefore, our historical growth rates may not be indicative of our future growth. If we are unable to open new stores or if store openings are significantly delayed, our revenue or earnings growth could be adversely affected and our business may be harmed.

In addition, we may experience delays in our store development and expansion plans due to unexpectedly long processing times or delays on the part of governmental agencies who issue necessary licenses, permits, and approvals. Delays in the permitting or licensure processes that may result from government shutdowns, staffing shortages, or similar actions that are out of our control, due to, among other things, loss of or uncertainty around federal funding, including the receipt of federal funding by states or state agencies where we operate, could lead to delays in building our stores and affect our store development and expansion plans, which could harm our results of operations and financial condition.

New stores, once opened, may not be profitable or may close, and the increases in average per store sales and comparable sales that we have experienced in the past may not be indicative of future results.

We have opened and plan to open additional stores in markets where we have little or no operating experience. The target consumer base of our stores varies by location, depending on a number of factors, including population density, other local coffee and convenience beverage distributors, area demographics, geography and weather. Our results have been, and in the future may continue to be, significantly impacted by the timing of new store openings. We have typically incurred the most significant portion of pre-opening expenses associated with a given store within approximately three months preceding the opening of the store. Due to the impact of inflation and other factors, including building and material costs, we are experiencing and expect to experience in the future increased costs in connection with new stores. Our experience has been that labor and operating costs associated with a newly opened store for the first several months of operation are materially greater than what can be expected after that time, both in aggregate dollars and as a percentage of sales. Our new stores commonly take several months or more to reach planned operating levels due to inefficiencies typically associated with new stores, including the training of new personnel, new market learning curves, inability to hire sufficient qualified staff, and other factors. We may incur additional costs in new markets, particularly for transportation and distribution, which may impact sales and the profitability of those stores. Accordingly, the volume and timing of new store openings may have a material adverse impact on our results of operations.

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Although we target specified operating and financial metrics, new stores may never meet these targets or may take longer than anticipated to do so. Stores we open in new markets may take longer to reach expected sales and profit levels on a consistent basis or may never reach such expected levels at all and may have higher construction, production, hiring and training, occupancy, or operating costs than stores we open in existing markets, thereby affecting our overall productivity. Any new store we open may never achieve operating results similar to those of our existing stores, which could adversely affect our business, financial condition or results of operations.

Some of our stores open with an initial start-up period of higher-than-normal sales volumes and related costs, which subsequently decrease to stabilized levels over time. In new markets, the length of time before average sales for new stores stabilize is less predictable and can be longer as a result of our limited knowledge of these markets and consumers’ limited awareness of our brand. In addition, our AUV and comparable sales may not increase at the rates achieved over the past several years. Our ability to operate new stores profitably and increase average store sales and comparable store sales will depend on many factors, some of which are beyond our control.

We may need to make greater investments than we originally planned in advertising and promotional activity in new markets to build brand awareness and/or maintain such awareness. We may find it more difficult in new markets to hire, motivate and keep qualified employees who share our values and maintain our same level of desired guest experience. We may also incur higher costs from entering new markets if, for example, we assign area managers to manage comparatively fewer stores than we assign in more developed markets. Also, until we attain a critical mass in a market, the stores we do open will have reduced operating leverage. As a result, these new stores may take longer to reach expected sales and profit levels on a consistent basis and may have higher construction, occupancy and operating costs than existing stores, and so may achieve target operating profit margins more slowly than existing stores or may never achieve such target margins.

Additionally, opening new stores in existing markets may negatively impact sales at our existing stores, even if it increases overall AUV in a region over time. The consumer target area of our stores varies by location, depending on a number of factors, including population density, other local retail and business attractions, area demographics and geography. As a result, the opening of a new store in or near markets in which we already have stores could adversely impact sales at these existing stores while ultimately growing the overall AUV in a region. However, existing stores could also make it more difficult to build our consumer base for a new store in the same market. Sales transfer between our stores may be significant in the future as we continue to expand our operations and could affect our revenue growth, which could, in turn, harm our business.

Our failure to manage our growth effectively could harm our business and operating results.

We have experienced rapid growth and increased demand for our products and in connection therewith, our organizational structure is becoming more complex as we scale our operational, financial, and management controls, as well as our reporting systems and procedures. For example, we have grown from 71 stores as of December 31, 2020 to 169 stores as of September 30, 2025. Our expansion has placed, and our expected future growth will continue to place, significant demands on our management team and guest experience, as well as research and development, sales and marketing, administrative, financial, and other resources. To manage growth in our operations and personnel, we will need to continue to grow and improve our operational, financial, and management controls and our reporting systems and procedures. We will require significant capital expenditures and the allocation of valuable management resources to grow and change in these areas. We may not be able to respond on a timely basis to all the changing demands that our planned expansion will impose on management and on our existing infrastructure. For example, in order to operate and grow our business, we are required to manage multiple relationships with various strategic partners, vendors and other third parties. In the event of further growth of our operations or in the number of our third-party relationships, our existing management systems, financial and management controls and information systems may not be adequate to support our planned expansion and allow for us to accurately monitor and predict changes in our costs and guest demand. Failure to accurately forecast our results of operations and growth rate may also result in harm to our business. If we experience a decline in financial performance, we may decrease the number of or discontinue new store openings, or we may decide to close stores that we are unable to operate in a profitable manner.

As we expand our business, it is important that we continue to maintain a high level of guest service and satisfaction as well as employee culture and satisfaction. If we are not able to continue to provide high-quality guest service as a result of these demands, our reputation, as well as our business, including a decline in

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financial performance, could be harmed. As we continue to grow, we face challenges of integrating, developing, training, and motivating a rapidly growing employee base in our various stores and maintaining our company culture across multiple offices and stores, and within our hybrid remote and remote home office workforce. Our ability to manage our growth effectively will require us to continue to enhance our systems, procedures and controls and to locate, hire, train and retain management and baristas, particularly in new markets which may require significant capital expenditures. Certain members of our management have not previously worked together for an extended period of time, and some do not have prior experience managing a public company, which may affect how they manage our growth and operations. See “—General Risks—Our management team has limited experience managing a public company.”

Our marketing programs may not be successful, and our new menu items and advertising campaigns may not generate increased sales or profits, resulting in harm to our financial results.

Attracting new guests, and retaining existing guests, is important to the success of our business. We incur costs and expend other resources in our marketing efforts on new menu items and advertising campaigns to raise brand awareness and attract and retain guests. Our approach to marketing, advertising, and branding is often novel and some campaigns may be significantly less successful than others. Marketing, advertising, or branding initiatives may not succeed or meet expectations, and even if they do, any increase in sales may not offset the costs and expenses we incur in establishing and rolling out such marketing, advertising and branding campaigns. Additionally, some of our competitors have greater financial resources than we do, which enable them to spend significantly more on marketing and advertising and other initiatives than we can. Should our competitors increase spending on marketing and advertising and other initiatives or our marketing funds decrease for any reason, or should our advertising, promotions and new menu items be less effective than those of our competitors, there could be an adverse effect on our reputation, results of operations and financial condition. Failure to attract new or retain existing guests, or failure to do so in a cost-effective manner, may result in an inability to increase revenue and financial harm to our business.

Our investments in technologies to enhance the guest experience may not generate the desired results and we may not be able to successfully expand our digital and delivery business.

For the nine months ended September 30, 2025 and for the years ended December 31, 2024 and 2023, our digital sales mix was approximately 15%, 11% and 8% of our total revenue, respectively. We are making investments in development, technology, digital engagement, and delivery in an effort to transform and enhance the guest experience. As part of these investments, we are focused on improving our service model and strengthening relationships with guests, in part through digital channels and loyalty initiatives, and by refining and enhancing our mobile application and mobile ordering and payment systems and processes. Experimentation with and implementation of innovations in products and technologies may result in inefficiencies, such as a slowdown in our store operations and traffic flow, distraction of management’s attention from our primary business, disruption of workflows, technical glitches, disruption of current systems and technology, and negative guest experiences. If these guest experience initiatives are not successfully executed or do not generate expected results, or if we do not fully realize the intended benefits of these significant investments, our financial results will suffer. It is also possible that the allocation of time and resources to these guest experience initiatives could negatively impact other areas of our business, or that we will fail to achieve optimal allocation of resources, which could materially harm our business and results of operations.

We believe that the expansion of our digital and delivery business is important to the growth of our business and our ability to remain competitive within the industry. Our ability to expand our digital business will depend in part on our ability to improve and evolve our technology, including but not limited to our website, our mobile application and our use of third-party delivery marketplaces. Our mobile application and online ordering system could be interrupted by technological failures or user errors, or be subject to cyber-attacks, which could adversely impact our revenue and brand image.

Substantially all of our delivery orders, including native delivery orders, are fulfilled through our third-party delivery partners. If a third-party delivery service we utilize (particularly for our native delivery orders) fails to deliver orders to our guests in a timely manner or provides unsatisfactory delivery service, our guests may attribute the bad experience to us, which may harm our reputation and may result in guests choosing to stop ordering from us. If a third-party delivery service we utilize ceases or curtails operations, experiences damage to its brand image, increases its fees, or gives priority or promotions on its platforms to our competitors, our business, reputation and our revenue may be negatively impacted. Furthermore, our partnerships with third-party delivery companies could cease to be available to us on acceptable terms or at all; for example, the third-

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party food delivery service industry has been consolidating and may continue to consolidate, which may give third-party delivery companies more leverage in negotiating the terms and pricing of contracts, which in turn could negatively affect our results of operations.

Interruption of our supply chain of coffee beans, food products, flavored syrups, dairy products, plant-based dairy-free alternative products or other ingredients, coffee machines and other restaurant equipment or packaging could affect our ability to produce or deliver our products.

We contract with our suppliers and manufacturers to procure supplies, equipment, and other materials and products.

Any material interruption in our supply chain, such as material interruption of the supply of coffee beans, energy drinks, food ingredients, flavored syrups, dairy products, plant-based dairy-free alternative products, regional offerings including baked goods and food products, coffee machines and other QSR equipment or packaging for our products for any reason, including the casualty loss of any of our roasting facilities, interruptions in service by our third-party logistic service providers or common carriers that ship goods within our distribution channels, trade restrictions, such as increased tariffs or quotas, embargoes or customs restrictions, pandemics, social or labor unrest, weather or natural disasters, terrorism (including cyberterrorism) or political disputes and military conflicts that cause a disruption in our supply chain could have a negative material impact on our business and results of operations. In addition, our growth may place increased demands on our information technology and inventory management systems, personnel and processes which will need to continue to evolve to keep pace with our growth strategy. For example, purchase of excess coffee beans may result in waste, which could negatively impact our margins, and purchases of too few coffee beans would not be able to support our sales, which could negatively impact our revenue and results of operations. Furthermore, as we do not maintain significant inventories at our stores, any delay or disruption in such deliveries could rapidly have an adverse material impact on our sales.

Most of our beverage and other products are sourced from a wide variety of business partners and we rely on these suppliers to provide high-quality products and to comply with applicable laws. For certain products, we may rely on one or very few suppliers. See “—We have a limited number of suppliers and distributors for many of our frequently used ingredients and supplies. If our suppliers or distributors are unable to fulfill their obligations under our arrangements with them, we could encounter supply shortages and incur higher costs.” Failures by any of our suppliers to meet our standards, provide products in a timely and efficient manner, or comply with applicable laws are beyond our control and could result in harm to our business, reputation, financial condition or results of operations.

We have experienced and may in the future experience disruptions in our supply chain for certain products including cups, lids, espresso machines and store equipment parts, and certain building materials and supplies. While we have, to this point, been able to find acceptable replacements or substitutes or prepurchase certain materials or items, this may not always be possible, especially if supply chains continue to suffer disruptions for extended periods of time. If we are unable to source critical or proprietary supplies, find acceptable replacements or substitutes, or adapt our construction strategies effectively, we may be unable to meet existing demands or sustain our growth, and it may negatively affect our business and results of operations. Finding acceptable replacements or substitutes may require trial and error that could cause losses or delays. If construction and building materials are not of sufficient quality or durability, this may lead to increased maintenance costs or even business interruption for necessary repairs or replacements in the future, and may also lead to construction defect claims which could be time-consuming and expensive to resolve. If we are unable to locate sufficient building or construction materials, or to successfully scale our construction and new store opening operations, we may not be able to meet existing demand or achieve our stated growth objectives, either of which could harm our business, reputation, financial condition or results of operations.

We have a limited number of suppliers, distributors and manufacturers for many of our frequently used ingredients, supplies and products. If our suppliers, distributors or manufacturers are unable to fulfill their obligations under our arrangements with them, we could encounter supply shortages and incur higher costs or fail to meet our sales demands or quality standards.

We are highly dependent on a limited number of suppliers – for example, for the nine months ended September 30, 2025 and 2024, 88% and 85% of our purchases came from three and two suppliers, Sysco Corporation, Too Sweet and, in the case of the nine months ended September 30, 2025, Royal Coffee, and for the years ended December 31, 2024 and 2023, 78% and 69% of our purchases came from two suppliers, Sysco Corporation and Too Sweet. Furthermore, we also rely on a single third party for the manufacturing of our Fuel energy

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drinks, which accounted for approximately 22% and 24% of total revenue for the year ended December 31, 2024 and nine months ended September 30, 2025, respectively. Due to the concentration of suppliers and distributors that we utilize, the cancellation of our supply arrangements with these suppliers or the disruption, delay or inability of these suppliers to deliver these products to our stores due to problems in production or distribution, inclement weather, natural disasters, unanticipated demand or other conditions may materially and adversely affect our results of operations even if we are able to establish alternative distribution channels.

Although our suppliers, distributors and manufacturers are contractually obligated to maintain standards of quality that we deem suitable and consistent with our brand, we do not control the businesses of our suppliers and distributors and our efforts to monitor the standards by which they perform may not be successful. If our suppliers or distributors fail to comply with food safety or other laws and regulations, or face allegations of non-compliance, their operations may be disrupted. See “—Food safety and quality concerns may negatively impact our brand, business and results of operations.” If that were to occur, we may not be able to find replacement suppliers on commercially reasonable terms or a timely basis, if at all.

If we need to replace an existing supplier or distributor, there can be no assurance that ingredients and supplies will be available when required on acceptable terms, or at all, or that a new supplier or distributor would allocate sufficient capacity to us to meet our requirements, meet our sales demand or meet our quality standards. If our suppliers or distributors are unable to fulfill their obligations under their contracts or we are unable to identify alternative sources, we could encounter supply shortages and incur higher costs or fail to meet our sales demands or our quality standards, any of which could have a material adverse effect on our reputation and results of operations. With respect to our Fuel energy drinks, while we own the recipes that comprise such drinks and have identified alternate third parties to manufacture these drinks for us if the need arose, we cannot guarantee we would be able to contract with such alternate third parties within a reasonable amount of time or at all, or upon similar pricing and volume terms, nor can we be assured that any such third party would be capable of producing our Fuel energy drinks in sufficient volume and quality. Any event, including those listed above, that results in a prolonged business disruption or shutdown related to our existing suppliers, distributors or manufacturers or a deterioration in our relationship with them, or any of our other third-party partners, in each case, could create conditions that prevent, or significantly and adversely affect, our sales, increase our expenses, create potential liabilities or damage our reputation, any of which could have an adverse effect on our business, financial condition and results of operations. Furthermore, we may not be a major customer of many of our suppliers, distributors or manufacturers, and these parties may therefore give other customers’ needs higher priority than ours, including some of our competitors who use the same third-party partners.

Tariffs on certain imports to the United States and other potential changes to U.S. trade policy could have a material adverse effect on our business, results of operations, prospects and financial condition.

The current U.S. presidential administration has imposed, or threatened to impose, tariffs or other restrictions on products, components or raw materials sourced from countries around the world. Moreover, these new tariffs, or other changes in U.S. trade policy, have triggered and may in the future trigger retaliatory actions by affected countries. For example, there have been increases and continue to be further indications that there may be an increase in tariff rates on various types of goods imported from the countries we buy coffee beans from, our most significant import, that we roast at our domestic roasteries, as well as the equipment, including refrigerators and espresso machines, as well as raw materials used to build, maintain and repair our stores and our equipment. Certain of the products we require as part of the roasting process or in our stores are currently subject to heightened tariffs and we may not be able to fully offset the cost increases through other cost reductions, or we may not choose to or be able to recover such heightened costs through price increases or surcharges passed on to our guests, which could have a material adverse effect on our business, results of operations, financial condition and cash flows.

Uncertainty around potential tariffs, embargoes, or similar restrictions could cause uncertainty and disruption in our supply chain and/or erode consumer confidence and impact consumer spending, whether or not any such tariffs, embargoes, or similar restrictions are ultimately enacted, and could have a negative material impact on our business, results of operations, prospects and financial condition. As the implementation of tariffs is ongoing, more tariffs may be added in the future or such tariffs may increase. Any tariffs or other barriers to trade affecting Mexico, Africa and Central and South America, from where we source most our coffee beans, could lead to, among other things, shortages and higher cost of procurement, and could negatively impact our business and results of operations. We currently do not hedge against our exposure to changing raw material prices. We may be negatively affected by changes in availability and pricing of raw materials, which could negatively impact our results of operations.

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Increases or sustained inflation in the cost of high-quality arabica coffee beans, dairy or other commodities or decreases in the availability of high-quality arabica coffee beans, dairy or other commodities could have an adverse impact on our business and financial results.

The availability and prices of coffee beans, dairy and other commodities are subject to significant volatility. We purchase, roast and sell high-quality whole bean arabica coffee beans and related coffee products. The high-quality arabica coffee of the quality we seek tends to trade on a negotiated basis at a premium above the “C” price. This premium depends upon, among other factors, the supply and demand at the time of purchase and the amount of the premium can vary significantly. Increases in the “C” coffee commodity price increase the price of high-quality arabica coffee and also impact our ability to enter into fixed-price purchase commitments. We frequently enter into supply contracts whereby the quality, quantity, delivery period and other negotiated terms are agreed upon, but the date, and therefore price, at which the base “C” coffee commodity price component will be fixed has not yet been established.

The supply and price of coffee we purchase can also be affected by multiple factors in the producing countries, such as weather (including the potential effects of climate change), natural disasters, crop disease, general increase in farm inputs and costs of production, inventory levels, political and economic conditions and the actions of certain organizations and associations that have historically attempted to influence prices of green coffee through agreements establishing export quotas or by restricting coffee supplies. Speculative trading in coffee commodities can also influence coffee prices. The price of coffee increased significantly in 2022, has since remained elevated, and further increased significantly during the year ended December 31, 2024, and may continue increasing throughout the remainder of 2025 and beyond. Because of the significance of coffee beans to our operations, increases in the cost of high-quality arabica coffee beans could have a material adverse impact on our business and results of operations. In addition, if we are not able to purchase sufficient quantities of green coffee due to any of the above factors or to a worldwide or regional shortage, we may not be able to fulfill the demand for our coffee, which could have a material adverse impact on our results of operations.

We also purchase significant amounts of dairy products, particularly milk, to support the needs of our stores. Additionally, and although less significant to our operations than coffee or dairy, other commodities, including but not limited to cocoa, plant-based “milks,” tea, sugar, syrups, energy and packaging material, such as plastics and corrugate, are important to our operations, and may be subject to increased costs, which could negatively impact our margins. Increases in the cost of other commodities, such as petroleum which in turn may increase the cost of our packing materials, or lack of availability, whether due to supply shortages, tariffs or similar government measures, delays or interruptions in processing may impact consumer spending, or could otherwise harm our business.

We rely in part on price increases from time to time to offset cost increases, including the cost of ingredients, commodities, insurance, labor, marketing, taxes, real estate and other key operating costs, and improve our results of operations. We have increased the prices of our beverages and food over the past few years, and we expect to further increase prices in the future. Our ability to maintain prices or effectively implement price increases may be affected by a number of factors, including competition, the effectiveness of our marketing programs, the continuing strength of our brand, and general economic conditions, including inflationary pressures. During challenging economic times, consumers may be less willing or able to purchase coffee from coffee stores, making it more difficult for us to maintain prices and/or effectively implement price increases. In addition, increasing prices could negatively affect the loyalty of our existing guest base and cause them to reduce their spending with us or impact our ability to attract new guests, particularly as we expand our footprint into new geographies where guests might have greater price sensitivity. If our price increases are not accepted by guests and reduce sales volume, or are insufficient to offset increased costs, our business, financial condition, and results of operations could be adversely affected.

We may not successfully optimize, operate and manage our roasting facilities, which could have an adverse impact on our business and financial results.

All of our coffee beans are roasted at our roasting facilities, located in Vancouver, Washington and Tempe, Arizona. A natural disaster, fire, power interruption, work stoppage or other calamity at one or both of these facilities, or any future facility, would significantly disrupt our ability to deliver our products and operate our business. If any material amount of our machinery or inventory were damaged, we cannot predict when, if at all, we could replace or repair such machinery, which could materially adversely affect our business, financial condition and operating results. Furthermore, as we continue to expand our operations at each of these roasting

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facilities and look to procure new roasting facilities, we may be unable to hire and retain skilled employees, which will severely hamper our expansion plans and roasting efforts.

We may experience plant shutdowns or periods of reduced production as a result of regulatory issues, equipment failure, or delays in deliveries. Any such disruption or unanticipated event may cause significant interruptions or delays in our business and loss of inventory and/or data, or render us unable to produce coffee beans in a timely manner, or at all. While in the event of a shutdown we may be able to increase production at our other roasting facility to offset such shutdown, any such requisite increase in production at a particular facility would require us to hire and retain more skilled employees to operate the facility to expand production to meet our needs.

If we do not have sufficient production capacity or experience a problem with our roasting facilities, our stores may experience delays or stoppages in receiving certain of our beverage and food items and our ability to meet guest demand could be impacted, which could in turn adversely affect our brand, business, financial condition, and results of operations.

Additionally, as we continue to expand our menu, offerings, geography and store count, we may need to add to or enhance our roasting capabilities and operations at our roasting facilities may become increasingly complex and challenging. Failure to successfully address such challenges in a cost-effective manner could harm our business and results of operations. The expansion of our roasting capabilities, including through the acquisition or development of additional roasting facilities, requires significant capital investment and we cannot guarantee that we will be able to obtain the capital necessary to support such expansion on favorable terms, or at all. In addition, a substantial delay in bringing any potential new roasting facility up to full production on our projected schedule would put pressure on the rest of our business operations to meet demand and production schedules and may hinder our ability to produce and deliver all the beans needed to meet consumer demand and/or to achieve our expected financial performance. Even if a new roasting facility is brought up to full production according to our current schedule, the capital expenditures and other investment expenses for such new facility may be greater than the corresponding sales and it may not provide us with all the operational and financial benefits that we expect to receive. Furthermore, the opening of a potential new roasting facility requires the efforts and attention of our management and other personnel, which has and will continue to divert resources from our existing business operations. We will also need to hire and retain more skilled employees to operate any new roasting facility.

We are subject to the risks associated with leasing property.

We operate all of our stores, roasting and warehouse facilities and corporate offices in leased facilities. Our leases generally have terms of 10 to 15 years with renewal options. Many of our current leases do not contain early termination options and we expect stores that we open in the future will be subject to similar long-term leases without early termination options. It is challenging to locate and secure leases on favorable terms for new stores as competition for locations in our target markets is intense, and development and leasing costs may continue to increase.

When our leases expire, we may fail to negotiate renewals, either on commercially acceptable terms or at all, which could cause us to pay increased occupancy costs or to close stores in desirable locations and result in negative publicity concerning any such termination or non-renewal. We may not be able to control increases in occupancy costs, particularly increases driven by macroeconomic factors or in geographies where the real estate market conditions favor landlords and developers. These potential increased occupancy costs and closed stores could have an adverse effect on our business, financial condition, and results of operations. Furthermore, the inability to renew an existing lease in key target markets could adversely affect our ability to execute on our overall growth strategy.

In addition, we may choose to close or relocate a store if it fails to meet our performance targets, which may cause us to incur significant lease termination expenses as well as additional expenses in connection with securing a new lease and construction and other costs in opening a new replacement store. Conversely, if we deem the lease termination and relocation expenses to be too high, we may decide to keep an underperforming store open, or sublease it, which may hurt our results of operations. We currently sublease certain properties and face future liability if subtenants default or incur contingent liabilities. If we continue to sublease properties, we may be unable to enter into such arrangements on acceptable terms and, even if we do, such arrangements may result in our incurring liabilities and expenses in future periods or the rent payments that we receive from subtenants being less than our rent obligations under the leases. In addition, we have provided credit support in respect of certain of our leases in the form of cash security deposits. If there were to be a default under such

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leases, the applicable landlords could draw under the letters of credit and/or seize the security deposit, which could adversely affect our financial condition and liquidity.

Total expenses under our operating leases account for a significant portion of our operating expenses, and represented 8.3% and 8.1% of our total revenue for the years ended December 31, 2024 and 2023, respectively. These substantial operating lease obligations could have negative consequences to our financial condition and results of operations, including requiring a substantial portion of our available cash to be applied to pay our rental obligations, thus reducing cash available for other purposes, as well as limiting our flexibility in planning for, and reacting to, changes in our business or our industry.

Our stores are geographically concentrated in the Western United States and Texas, and we could be negatively affected by conditions specific to those regions.

As of September 30, 2025, all of our stores are located in the Western United States or Texas. Adverse changes in demographic, unemployment, economic, regulatory or weather conditions in the Western United States or Texas have harmed, and may continue to harm, our business. As a result of our concentration in these markets, we have been, and in the future may be, disproportionately affected by these adverse conditions compared to other chain beverage stores with a more expansive national footprint. For example, in recent years, wildfires spread across most western states causing poor air quality which reduced consumers’ willingness to venture outside their homes and, we believe, reduced our AUVs, and any future wildfires may have a similar impact. Additionally, hurricanes and flooding have impacted areas in Texas in which we operate. If areas in which we operate experience wildfires, flooding or other natural disasters, such conditions may also damage stores and the communities in which we operate which could decrease demand for our products and reduce store visits by our guests. In addition to rebuilding costs, prolonged economic recovery within affected communities may have a negative impact on our results of operations.

We face potential liability with our gift cards under the property laws of some states.

Our gift cards, which may be used to purchase beverages and food in our stores, may be considered stored value cards by certain states in accordance with their abandoned and unclaimed property laws. These laws could require us to remit cash to such state in an amount equal to all or a designated portion of the unredeemed balance on the gift cards based on certain card attributes and the length of time that the cards are inactive.

The analysis of the potential application of the abandoned and unclaimed property laws to our gift cards is complex, involving an analysis of constitutional, statutory provisions and factual issues. In the event that one or more states change their existing abandoned and unclaimed property laws or successfully challenge our position on the application of its abandoned and unclaimed property laws to our gift cards, or if the estimates that we use in projecting the likelihood of the cards being redeemed prove to be inaccurate, our liabilities with respect to unredeemed gift cards may be materially higher than the amounts shown in our consolidated financial statements. If we are required to materially increase the estimated liability recorded in our consolidated financial statements with respect to unredeemed gift cards, our financial condition and results of operations could be adversely affected.

Risks Related to Our Brand

Our brand is core to our success, and damage to our brand or reputation and negative publicity could negatively impact our business, financial condition and results of operations.

Our reputation and the quality of our brand are critical to our business and success in existing markets and will be critical to our success as we enter new markets. Brand value is based in part on consumer perceptions on a variety of subjective qualities. We believe that we have built our reputation on the excellent guest experience we provide, our high-quality beverages, our commitment to our guests and communities as well as our strong employee culture, and we must protect and grow the value of our brand in order for us to continue to be successful, particularly outside of the Western United States and Texas where our brand may be less well-known. Any incident that erodes consumer loyalty for our brand could significantly reduce its value and damage our business.

We may, from time to time, be faced with negative publicity, including on social media, regardless of its accuracy, relating to product quality; pricing; the safety, sanitation and welfare of our stores; guest complaints or litigation alleging illness or injury; health inspection scores; integrity of our or our suppliers’ food processing, employment practices and other policies, practices and procedures; employee relationships and welfare; the

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appearance of our stores on third-party delivery platforms that may contain inaccurate menu pricing and extended delivery times; public perception, or actions, whether or not to us; third parties with which we have a business relationship, including certain companies that we partner with to provide baked goods and select food offerings in certain of our Texas locations; our brand representatives and social media influencer network, and their reputation, public perception, or actions, whether or not related to us; or other matters. Negative publicity or actions taken by individuals that we partner with, such as brand representatives and influencers, that fail to represent our brands in a manner consistent with our brand image or act in a way that harms their reputation, whether through our social media accounts or their own, could harm our brand reputation, potentially trigger boycotts of our stores or result in civil or criminal liability and can have a negative impact on our financial results. Negative publicity may adversely affect us, regardless of whether the allegations are substantiated or whether we are determined to be responsible, and it may be difficult to address negative publicity, including as a result of fictitious media content (such as content produced by generative AI technologies or bad actors). In addition, the negative impact of adverse publicity relating to one store may extend far beyond the store involved, to affect some or all of our other stores. A similar risk exists with respect to beverage businesses unrelated to us if guests mistakenly associate such unrelated businesses with our operations. Employee claims against us based on, among other things, wage and hour violations, discrimination, harassment or wrongful termination may also create not only legal and financial liability but negative publicity that could adversely affect us and divert our financial and management resources that would otherwise be used to benefit the future performance of our operations. A significant increase in the number of these claims or an increase in the number of successful claims could harm our business.

Ultimately, the risks associated with any such negative publicity or incorrect information cannot be completely eliminated or mitigated and may harm our business.

If we fail to offer high-quality guest experience, our business and reputation will suffer.

Numerous factors may impact a guest’s experience which may in turn impact the likelihood of such guest returning. Those factors include guest service, convenience, taste, price, quality, location and condition of our stores and brand image. In addition to providing high-quality products, we encourage our employees, including our baristas, to provide a positive guest experience, to connect with local communities and get to know their guests, and we believe the genuine connection we build with our guests is a critical component of our brand. As we grow, it may be difficult for us to identify, recruit, train and manage enough people with the right skills, talent and attitude to provide this guest experience and our brand may suffer as a result.

Our inability or failure to utilize, recognize, respond to, and effectively manage social media could have a material adverse effect on our business.

Social media and internet-based communication or review platforms give individual users immediate access to a broad audience. These platforms can also facilitate rapid dissemination of negative publicity, such as negative guest or team member experiences. Adverse publicity, regardless of its accuracy, concerning our stores and our brand may be shared on such platforms at any time and has the potential to quickly reach a wide audience. The resulting harm to our reputation from negative publicity on social media may be immediate and we may fail to correct or otherwise respond to the information or circumstance that is the subject of such publicity, whether or not we have the opportunity to do so. It is challenging to monitor and anticipate developments on social media in order to effectively and timely respond and our failure to do so, or to do so successfully, may have a material adverse effect on our business, financial condition, and results of operations.

However, social media platforms are a rapidly evolving and important marketing tool, which we utilize to help us engage with guests and potential guests. For example, we maintain Facebook, Instagram and TikTok accounts, among other accounts, and we have partnered, and expect to continue to partner, with social media influencers who promote our brand and may also produce content for us. As the landscape of social media platforms develops, we believe we must maintain our presence on existing platforms and establish a presence on emerging platforms. Many of our competitors are expanding their use of social media. We believe our success will depend on our ability to continuously innovate and develop our social media strategies to appeal to guests, maintain brand relevance, and effectively compete with our peers, and we may not do so effectively. In addition, a ban or legal or regulatory restrictions on the use of any social media platform, such as TikTok or Instagram, on which we, and social media influencers that we partner with, have acquired significant followers, may adversely affect our ability to engage with guests and promote our brand.

There are a variety of additional factors associated with our use of social media that may harm our business and result in negative publicity, including the possibility of improper disclosure of proprietary information,

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exposure of personal information of our team members or guests, the failure by us or our team members to comply with applicable law and regulations, any inappropriate use of social media platforms by our team members, fraud, hoaxes, or malicious dissemination of false information. While we contractually require the social media influencers or celebrities with whom we partner to adhere to certain quality control requirements in connection with their promotion of our brand or creation of content for us, we do not control the actions of such individuals and our association with influencers or celebrities who become embroiled in controversy or are subject to bad publicity, regardless of whether such controversy or publicity is related to our business, could damage our reputation, and our partnership with any such influencer or celebrity could be difficult and costly to unwind and otherwise address.

We are subject to evolving rules and regulations with respect to ESG matters.

We are subject to a variety of ESG-related rules and regulations promulgated by a number of governmental and self-regulatory organizations, including with respect to climate change, greenhouse gases, water resources, packaging and waste, animal health and welfare, deforestation and land use. ESG-related rules and regulations continue to evolve in scope and complexity and we are working to manage the risks and costs to us and our supply chain associated with these types of ESG matters, however, there is no assurance that such efforts will result in the intended effective management of such risks and costs. In addition, as the result of such focus on ESG matters, we may face increased pressure to provide expanded disclosure, make or expand commitments, set targets, or establish additional goals and take actions to meet such goals, in connection with such ESG matters. These matters and our efforts to address them could expose us to market, operational, reputational and execution costs or risks.

As ESG best practices and reporting standards continue to develop, we may incur increasing costs relating to ESG monitoring and reporting and complying with ESG initiatives. In the event that we communicate certain initiatives or goals regarding ESG matters in the future, we could fail, or be perceived to fail, in our achievement of such initiatives or goals, or we could be criticized for the scope of such initiatives or goals. If we fail to satisfy the expectations of certain investors and other stakeholders or our initiatives are not executed as planned, our business, financial condition, reputation, results of operations, and prospects may be adversely affected.

Risks Related to People and Culture

We believe our culture has contributed to our success, and if we cannot maintain this culture as we grow, we could lose employee engagement, which could harm our business and reputation.

We believe our people-first culture is a critical component of our success, guest loyalty and ability to enter new markets and open new stores. We have invested substantial time and resources in developing our corporate culture. We have built out our leadership team with an expectation of protecting this culture and an emphasis on shared values. As we continue to develop and expand across the United States, we will need to maintain our culture among a larger number of employees dispersed in various geographic regions. Any failure to preserve our culture could negatively affect our future success, including our ability to retain and recruit personnel, and result in reputational harm and a loss of guest loyalty.

Our inability to identify, recruit and retain qualified individuals for our stores could slow our growth and adversely impact our ability to operate.

Our success depends substantially on the contributions and abilities of our employees, particularly our baristas, on whom we rely to give guests a superior experience and elevate our brand. Our success depends in part upon our ability to attract, motivate and retain a sufficient number of qualified store leads, almost all of whom come from within our system, and baristas to meet the needs of our existing stores and to staff new stores. Some of our baristas advance to become store leads and multi-store leads and when they do, their prior positions need to be filled. We aim to hire genuine, motivated and welcoming individuals who strive for excellence and are committed to forming authentic and meaningful relationships with guests to uplift and make an impact in their community. It may be difficult or impossible for us to recruit and retain a sufficient number of qualified individuals to fill these positions in some communities. Competition in these communities for qualified staff is high and shortages may make it difficult and expensive to attract, train and retain the services of a satisfactory number of qualified employees, which could delay the planned openings of new stores and adversely impact the operations and profitability of existing stores. Such shortages may also require us to pay higher wages and provide greater benefits.

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We place a heavy emphasis on the qualification and training of our personnel and spend a significant amount of time and money on training our employees. Any inability to recruit and retain qualified individuals may result in higher turnover and increased labor costs, and could compromise the quality of our service, all of which could adversely affect our business, reputation, financial condition and results of operations. Any such inability could also delay the planned openings of new stores and could adversely impact our existing stores. Any such inability to retain or recruit qualified employees, increased costs of attracting qualified employees or delays in store openings could harm our business.

Additionally, the growth of our business can make it increasingly difficult to locate and hire sufficient numbers of key employees, to maintain an effective system of internal controls for a dispersed chain and to train employees to deliver consistently high-quality products and guest experiences, which could materially harm our business and results of operations. In addition, growth and the addition of new stores may result in inefficiencies in our staffing, which can increase overtime costs or otherwise impact our results of operations.

Changes in the cost of labor could harm our business.

Our business could be harmed by increases in labor costs, including those increases triggered by inflation, regulatory actions regarding wages, scheduling and benefits and increased health care and workers’ compensation insurance costs, which, in a retail business such as ours, are some of our most significant costs. In particular, our staff are typically paid wage rates at or based on the applicable federal, state or local minimum wage, and increases in the applicable minimum wage have in the past and will increase labor costs. From time to time, legislative proposals are made to increase the minimum wage at the federal, state or local level, such as Assembly Bill 1228 in California, which created a minimum wage of $20 per hour for fast food workers, effective April 1, 2024, among other provisions. As federal, state or other applicable minimum wage rates increase, we may be required to increase not only the wage rates of minimum wage baristas or other employees, but also the wages paid to other hourly employees. We may not choose to increase prices in order to pass future increased labor or commodity costs on to guests, in which case our margins would be negatively affected. If we do not increase prices to cover increased labor or commodity costs, or if such increase is delayed, the higher prices could result in lower sales, which may also reduce margins.

Unionization activities may disrupt our operations and affect our results of operations.

Although none of our employees are currently covered under collective bargaining agreements, our employees may elect to be represented by labor unions in the future. If a significant number of our employees were to become unionized and collective bargaining agreement terms were significantly different from our current compensation arrangements, it could adversely affect our business, financial condition or results of operations. In addition, one or more labor disputes involving some or all of our employees may harm our reputation, disrupt our operations and reduce our revenue, and resolution of disputes may increase our costs. Further, if we enter into a new market with unionized construction companies, or the construction companies in our current markets become unionized, construction and build out costs for new stores in such markets could materially increase.

We depend on our Co-Founders, executive officers and other key employees, and the loss of one or more of these employees or an inability to attract and retain other highly skilled employees could harm our business.

Our success depends largely upon the continued services of our executive officers and other key employees, and the hiring and retention of additional executives and other key personnel. We rely on our leadership team in the areas of finance, marketing, sales, guest experience and administration. From time to time, there may be changes in our executive management team resulting from the hiring or departure of executives, which could disrupt our business. The loss of one or more of our executive officers or key employees could harm our business. Changes in our executive management team may also cause disruptions in, and harm to, our business.

Our Co-Founders and directors, Jeff Hernandez and Daniel Brand, and Mark Davis, our Chief Executive Officer, each continue to play an important role leading the Company, driving our culture, determining the strategy, and executing against that strategy across the company. If Mr. Hernandez’s, Mr. Brand’s or Mr. Davis’s leadership or services became unavailable to us for any reason, it may be difficult or impossible for us to find adequate replacements, which could cause us to be less successful in maintaining our culture and developing and effectively executing on our company strategies.

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Risks Related to Information Technology Systems, Cybersecurity, Data Privacy and Intellectual Property

If we or our third-party providers experience failures, outages, or sub-standard performance of our information technology systems, our operations could be disrupted and there may be damage to our business

Black Rock Coffee Bar, Inc. 10-Q